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Old 06-02-2009, 12:19 PM
 
1 posts, read 1,997 times
Reputation: 10

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I recently inheirited a cottage on Lake Michigan and live in another state.

I am appalled at the property taxes. I do not mind paying in taxes to support schools, etc in the area but the infalted amount is quite extraordinary. The property is assessed at 473,000 and the taxes are 21,000.00 a year! I cannot bring enough in rent to cover the taxes. Does anybody have any suggestions? It breaks my heart that I have to sell a property that has been in the family for over 50 years.

I welcome any suggestions!
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Old 06-02-2009, 02:37 PM
 
Location: Grand Rapids Metro
8,882 posts, read 19,854,193 times
Reputation: 3920
Quote:
Originally Posted by shellseeker1 View Post
I recently inheirited a cottage on Lake Michigan and live in another state.

I am appalled at the property taxes. I do not mind paying in taxes to support schools, etc in the area but the infalted amount is quite extraordinary. The property is assessed at 473,000 and the taxes are 21,000.00 a year! I cannot bring enough in rent to cover the taxes. Does anybody have any suggestions? It breaks my heart that I have to sell a property that has been in the family for over 50 years.

I welcome any suggestions!
If the property is owned free and clear, can't you draw on the principal somehow (reverse mortgage maybe?) It's kind of late now, but paying the property taxes should have been factored in when the will was set up (as in, an account set up by the estate to help pay the property taxes, if the survivors couldn't afford to pay them but wanted to hold on to the property).
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Old 06-02-2009, 03:18 PM
 
24,832 posts, read 37,344,316 times
Reputation: 11538
Quote:
Originally Posted by shellseeker1 View Post
I recently inheirited a cottage on Lake Michigan and live in another state.

I am appalled at the property taxes. I do not mind paying in taxes to support schools, etc in the area but the infalted amount is quite extraordinary. The property is assessed at 473,000 and the taxes are 21,000.00 a year! I cannot bring enough in rent to cover the taxes. Does anybody have any suggestions? It breaks my heart that I have to sell a property that has been in the family for over 50 years.

I welcome any suggestions!
If you are going to rent it, it becomes a business. That makes the taxes a deduction. Talk to a CPA.
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Old 06-02-2009, 07:53 PM
 
Location: East Grand Rapids, MI
845 posts, read 3,271,858 times
Reputation: 241
Your state of residence has nothing to do with it.
This is a common issue for all cottages passed down between families.
Found some decent info here: Cottage Law - Saving the Family Cottage by Stuart J. Hollander
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Old 06-02-2009, 09:00 PM
 
24,832 posts, read 37,344,316 times
Reputation: 11538
Quote:
Originally Posted by suydam View Post
Your state of residence has nothing to do with it.
This is a common issue for all cottages passed down between families.
Found some decent info here: Cottage Law - Saving the Family Cottage by Stuart J. Hollander
Sure it does. They can't take the homestead exemption.
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Old 06-02-2009, 09:02 PM
 
Location: East Grand Rapids, MI
845 posts, read 3,271,858 times
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Quote:
Originally Posted by Driller1 View Post
Sure it does. They can't take the homestead exemption.
They can't anyway, can they? If they don't live there, they're going to get "found out" either way.
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Old 06-03-2009, 06:08 AM
 
Location: Grand Rapids Metro
8,882 posts, read 19,854,193 times
Reputation: 3920
Quote:
Originally Posted by Driller1 View Post
Sure it does. They can't take the homestead exemption.
No, they still could not take a homestead exemption on the cottage if they had another primary residence in Michigan.

I've heard of out-of-staters claiming their cottage as their primary, but I think assessors in these lakefront communities know what to look out for (and may require proof of year-round residence).
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