Property Taxes in Clawson - Millennial guy (Royal Oak, Birmingham: 2015, insurance)

[mimoo30]

Hello, I'm a millennial guy with limited home purchasing experience and was looking for some advice from the experts here. What I'm wondering is if I'm overpaying in property taxes and if so what are the ways to fix this problem. For a breakdown:

I purchased a home last year for $170K in Clawson and have been paying escrow of $475 dollars/monthly which breaks down to $375/month of property taxes and $100/month in homeowner insurance. On a yearly basis, its a little more than $4500 in property taxes and equivalent to 2.6% of the home value. Adding in homeowner insurance and 475*12 = $5700 which is 3.3% of home value.

My concern is that I'm looking at properties sold and their respective taxes and no one is paying near $4500 that I'm paying. I understand that property taxes are based on the time when a home is purchased and assessed, but I'm seeing homes that were purchased a few years ago then recently sold but the property taxes are still not near $4500 for a similar home value.

I'm also looking at my assessed value per realtor.com data and noticed it increased by ~$10K for each of the last 3 years moving from $61K in 2013 to $72K and now $82K for 2014 and 2015 respectively.

For people familiar with clawson property taxes, is this in the ballpark as a fair amount? If not, what are the recommended steps to fix this? I'm having a hard time finding similar property values paying my level of property taxes. Thank you for the help everyone.

[Geo-Aggie]

According to the city website, assuming you have claimed the residence as your principal residence you would be paying 52-54 mills

Welcome to City of Clawson, MI

A mill is $1 per $1,000 of taxable value. If your taxable value is 82k, $82*52=$4264 per year.

All I have to say is damn, I had no idea Clawson had such high property taxes and I'm sorry. Unfortunately what I imagine is going on is that Clawson property values have increased significantly over the past couple years. Mill rates were set for typical homes selling for 120-130k and now typical homes are selling for 180-200k, so the city is raking in a lot of money which it may or may not need. Hopefully you see major improvements in services going forward, but it all depends on how responsible and honest city government is there.

Also, some fun tax related info for anyone else wanting to look up their town millage rates can be found here:
http://www.michigan.gov/documents/ta...e_515118_7.pdf

[jaynarie]

Since the other posters were able to give you how much you owe in taxes, I can explain why they are over collecting by a few hundred dollars each year.
Michigan has summer and winter taxes. Depending on the taxing authority, Michigan generally gives you 75-90 days between issuing the bill and taxes becoming delinquent. For the majority(if not all) of the state, a bill was issued on July 1st and taxes were delinquent after September 14th. The bill was likely mailed slightly before July 1st, which is where the 75-90 day time frame comes in.
Anyway, since your mortgage company could only guess as to what your taxes would amount to prior to receiving the bill in June/July, they have to estimate high so they know they can cover the tax payment.
The general rule of thumb used by mortgage and title companies when estimating taxes is to add 20%. 99% of the time, adding 20% will be adequate. (I'm not saying they add 20% into your escrows, but if you refi and it is close to a tax installment being due, they may estimate the taxes and require you to pay as a condition of the refi.) The underwriter determines your escrows, and I'm not sure what they base it on, but I'd assume they look at trends over the last several years.
Your escrow payment will adjust as you own the house longer. It will go up or down depending on what happens with property values, and as millages are passed or expire.

[belleislerunner]

Birmingham is only 44 and Royal Oak 42. Then of course, Clawson is much nicer than both those cities - so the property taxes make sense =)

Be glad you don't live in Highland Park - that mill is 92. Almost double yours!