[dagnabit9]

I am moving from NM back to Michigan in the very near future (next couple of months) and want to know a few things about property taxes in Michigan. Here in NM (well, at least in the Albuquerque area), when you buy a previously owned home, the property taxes go up immediately to the appraised value - not the 3% per year that the taxes are capped at if you owned it (tax lightning I think they call it). I am going to buy another house in Michigan (Lapeer, Oakland, St. Clair counties) and would like to know if I will get zapped like I just explained. Also, I am retired military and would like to know what kind, if any, exemptions you can make to your property taxes to get them somewhat lower.

[Bydand]

We bought a house last year and the valuation was changed to reflect the purchase price. I can't answer about any exemptions or special valuations due to veteran status.

[dagnabit9]

Are yearly property tax increases capped at some percentage, say, like 4% per year, Bydand? I owned in Michigan back in the late 70's (I was quite a bit younger then) and don't remember things like that.

[zthatzmanz28]

Believe taxation has changed GREATLY since the 1970s...Something called the HEADLEE AMENDMENT??

Also home owners have a HOMESTEAD paper that "helps" keep taxes reasonable..ROFLMAO...

[dagnabit9]

I was trying to head off having a "wake-up" call when I looked at the tax bill. However, when I think of how much housing has depressed in Michigan and the fact that the taxman will never lower the tax on a property (do the assessed values ever go DOWN?), I think I will probably be OK. Thoughts? Comments??

[Bydand]

Actually, our taxes went down this year. Our tax person in this County has been doing a great job at trying to keep things fair (I really believe he is the exception though). Ours went down when we bought it because we got a great buy on the house and hte people who owned it before us only had it about 18 months when his job moved them across the State, then it went down this year when they announced that the average price in the County went down and our valuations were adjusted accordingly.

I believe there is a cap at how much they can raise your taxes in a year, but honestly I couldn't tell you for sure.

[skyl4rk]

When you buy a property, the taxable value goes up to the Standard Equalized Value (SEV), which is roughly one half of the true cash value. That is called "uncapping". From that year, your taxable value is capped and limited to increases equal to the the rate of inflation. So the value of your house may go up but your taxable value will only go up by the rate of inflation. The strategy in Michigan is buy and hold.

People who live in a property they own can claim a homestead exemption, which lowers the millage applied to your taxable value to calculate your property tax.

[dagnabit9]

Is there a Veterans exemption?

[djmilf]

There is no Veterans exemption.

To slightly add to skyl4rk's post, the state equalized value of your house will go up by the rate of inflation or 5%, whichever is less. So if inflation ever goes to 10%, the taxable value can rise only 5%.

The tax cap applies to your primary residence. I believe that a second house, such as a vacation home, doesn't have its taxable value capped.

I'm uncertain as to the homestead status / millage reduction mentioned by skyl4rk. There is a Michigan Homestead Property Tax Credit on the state's MI-1040CR income tax form, but this reduces the income tax owed by qualifying tax payers to the state of Michigan. It's more of a benefit to people who live in a house with a relatively high taxable value but who have a relatively lower income.

[Sparrow_temp]

Hope the original poster has a good reason for coming back to MI. I moved from MI to NM and think the advantages outweigh the disadvantages. I'd also suggest NOT buying a house if there's a chance of you moving again in the next 5 years. Rent a house and let the owner assume all of the risks and responsibilities of it so you can be more mobile in these bad economic times.