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2011 assessment increases
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Squeaky
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PostPosted: Sun Mar 06, 2011 7:58 pm    Post subject: Reply with quote

Very interesting Mike. Am learning alot and I am going to learn more as this whole thing in Michigan goes on. Am taking a bigger interest in it. When things are going the way they are and we are paying more, we need to know more-all, and need to know where the money is going. I am matching taxes with our homestead and the Island. I sure have the questions for our tax guy. Rolling Eyes Hope he has the time for my questions.... Am sure he will, this is his job......

Am going to learn on this Prop A also. Should have paid more-real attention to all of this along time ago..
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mikewhite
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PostPosted: Mon Mar 07, 2011 7:58 am    Post subject: districts Reply with quote

If the school here should fail to operate for three years, it would be placed with some other district. Cheboygan's operating millage is 18 mills plus other millages for building. When Mackinac Island was approached on the subject, the superintendent said they would fight the combining of the two islands into one district. They have a operating millage higher then BBI. I can't remember how much, but it is like 6 mills. I gave a speech a few times on this subject, one in Lansing in the capital building and one here at the Hoover Building. I could find those speeches and post them.

Cheboygan was interested at first. They thought that they might get some assets. When I told them that the school is rented from the township, you could see the smile drain from their faces.

I did a lot of calculating and found that no district would benefit financially by taking the BBI district. The state, on the other hand would have gained a lot of money for the state school fund.

In the end everyone, including homestead people, would have had their taxes go way up and have no school to show for it.

The school district would not exist right now if a special provision had not been put into the school code to allow it to exist.
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Conis
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PostPosted: Mon Mar 07, 2011 10:55 am    Post subject: Reply with quote

THIS IS NOT A TAX BILL... Then what is it?

First, There is an error on the BBI notice. The state wide inflation adjustment factor is 1.017 not .097 as indicated (which was a downward adjustment in 2010).

Your taxable value cannot exceed the SEV.

Unless you have made improvements ( noted by building permits) your taxable value should not increase except by 1.017. IF property value of all sales in the twp have increased (noted by property transfers), your assessed value may increase.

The assessed value and SEV generally should NOT exceed 50% of property value in the current market.

In all instances of other real estate I own in Cheboygan county and downstate, Assessed value and SEV have tanked below taxable value and taxes have decreased. My homestead which I have owned for 35 years will probably begin decreasing in taxes in 2012 as the taxable value is now very closed to assessed value.

The Hedley amendment prevents property owners from being "taxed out of ownership" by capping taxable value regardless of increasing value of surrounding property. As was the case prior to 2008 or so before the bubble burst. The longer you have owned property, the further ahead you are if values are on the increase.

BUT... if values are decreasing, it may take a while for assessed and SEV value to drop below taxable value. When it does, your taxes will drop, too.

If there is a property transfer, the sale price becomes the new Appraised value for the new owner. So, someone who has had their homestead for a long time may not get taxed out of their place, nor are they usually willing to relocate and pay much higher taxes on a new property bought at a higher value... basically starting over from scratch with the Hedley tax game.

I have no clue if tax assessors make stuff up as they go along, just because they think they can? That would be totally subjective wouldn't it? I believe it is done by formulas using "comps" (comparable value property classes such as undeveloped land, waterfront, residential by sq footage etc).

If property sales are strong and prices are rising, your assessed value and SEV will rise based on comps.

If sales are slow or flat, still based on comps but is may take a while for theses comps to show up as in foreclosures, tax sales, "ditch out sales" etc.

BBI is the one exception where assessed value and SEV have increased slightly and are still behind taxable value. How come?

OPINION: I suspect that BBI is one of the few places in Michigan that hasn't totally tanked (so far) as far as property values. Sales my be slow but values have been slightly increasing regardless. It is a unique place. There is only so much private land available for sale. I also believe that many BBI property owners are not from Michigan, so money may flow in from more prosperous places. More immune, so to speak?

If gasoline and transportation costs to the island increases dramatically, this could all change very quickly. From this years notice, it looks like the tipping point is near. In 2010 I noticed more for sale signs than usual. Guess we'll see what shakes out in 2011.

SP, did I explain this correctly? Feel free to correct.

BBI taxes are really low regardless. I assume because of the reduced school millage.
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Conis
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PostPosted: Mon Mar 07, 2011 11:31 am    Post subject: Reply with quote

Clarification:

Any who list their places as primary (homestead) qualifies for homestead exemption ( lower tax rate) Rosemary?

As Doug pointed out, there may have been very few BBI sales in 2010 but the assessor works with what there is to go on. What applies to waterfront value isn't the same as vacant acreage or a cabin not on water. Property classes.

If you bought property in 2010, you will be taxed on the purchase price which is the updated accessed value. If you drew a building permit, the value of improvements and additions will increase assessed value and potentially taxable value.

Example:
Adjoining my 20 ac homestead here (midstate), a luxury-country estate: 6000 sq ft three story home, 40 ac with virgin -huge trees, and three humongous pole barns (like 80 x120x 12') just sold for $150k after sitting on the market since 2006. About 25% of the market value in 2006. Now there's a "tanking comp" that will drag assessed values of adjacent twp properties down like a sack of bricks. Nothing else is selling, whatsoever. The comps will be tax sales, foreclosure sales and "ditch out-giveaway" sales.

Basically, the former older owner just ditched out to get out from under it... finally... and cut the losses.

Likewise, my homestead is now assessed at about 30% of what the market value would have been in 2006, but still not low enough to decrease taxable value (this year anyway) but that's because I have owned the place for 35 years, and for many years, taxable value was about 30% of assessed value.

The Hedley amendment works great as long as values are increasing. But takes a while to catch up in reverse. The longer you have owned it, the longer the reverse catch up may take.
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Uncle Steve
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PostPosted: Mon Mar 07, 2011 4:22 pm    Post subject: Reply with quote

TD AKA Conis,. you should be a tax board of review member... You did a GREAT job of explaining a very confusing topic.. Taxable value, SEV, and appraised values..

Good job... Beer! Wink
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Conis
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PostPosted: Mon Mar 07, 2011 5:51 pm    Post subject: Reply with quote

As long as I am this far out on a limb.

NO WAY I am getting involved in Board or Review BS. I would need a body guard.

I might point this tidbit out. I don't know how things go on BBI but I am not whining about my BBI taxes which I consider to be very reasonable by contrast to what I pay elsewhere. Assessed value means very little. Taxable value is what comes out of your pocket. My taxable value went up like $300 which converted into mills means my 2011 BBI taxes went up like $11. Big deal.

In Cheboygan county, my taxes are now going down because taxable value has finally caught up with assessed value ( in reverse gear.)

Appraisal value isn't the same as assessed value. Two different games but all based on comps. Appraisers can make stuff up as they go along to satisfy the bank mortgage Nazis. Assessors have to go by rules and property classifications and only have comps to work with.

I can tell you this much. Before you get all PO and go stomping into the tribunal (wherever) you had better do your homework, understand the Hedley amendment and the difference between taxable, assessed and SEV values. If you want to make an issue of things, look at their figures first and see where you are at.

If you poke a hornets nest, you may not like what flies out. The township can have a second look at your property to verify the assessment is correct and in doing so, may find their assessment is inaccurate to THEIR benefit and your taxes could go UP if they have mis measured or missed improvements etc.

The Hedley amendment isn't rocket science. Overall, it works really well for long term property owners but not so well for those constantly upgrading. Each time a property is transferred to a new owner, start over on what was paid for it. Pretty fair actually.
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Kevin Gibbons
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PostPosted: Tue Mar 08, 2011 8:09 pm    Post subject: Reply with quote

Conis you sound like a tax asessor. If I didn't know better I would think you knew what you are talking about. Hey I haven't seen you in a couple years, one these days we need to get together and have drink. Anyways take care
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Spartan-1
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PostPosted: Wed Mar 09, 2011 10:20 pm    Post subject: Reply with quote

PEOPLE...PEOPLE!!! Property Taxes....It's only money, Man, that stuff grows on trees Cool What you should really be sad about is the fact that it is nearly time to put the snowmobiles away for the season....NOW that's depressing Sad
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Sparty
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PostPosted: Wed Jun 01, 2011 1:36 pm    Post subject: Property Taxes Reply with quote

I noted that a number of the previous posters indicated that the "sale price" of a piece of property would be the new assessed value once the property sells and closes. That is not correct, at least not in many cases.

It is my understanding that the assessed value is what the assessor determines is the "fair market value" of the property. In some cases if you purchase a property for say $10,000 in an unrelated party sale, the assessor, if he feels that is an unrealistically low price or bargain purchase, can set the assessed value at a higher number such as $15,000. On the other hand, if he feels the value is only $8000, he can set the value at $8000 or some lower value.

I had the following personal experience with property down state. I purchased an acre of land adjacent to my house for $1000. It was an odd shaped parcel, low land, with no road access other than through my existing property. The township assessed the lot at $10,000, the same price as lots, with deeded access, sold in the same area at the same time to friends of mine. When I protested and explained the situation, the board of review lowered the assessed value to $800, $200 less than I told them I paid.

It has been my experience that the assessed value upon a purchase is often a bit less than the actual purchase price. Although it is my personal opinion, I feel this is done to eliminate protests. It is hard to protest an assessment that is less than what you paid for the property.

What really matters is not the assessed value of your property, but that value in relation to your neighbors or similar property in your area. If your $100,000 property is assessed at $90,000 but other owners of $100,000 properties are assessed at $75,000, you are paying too much in taxes even though you may feel you are getting a deal because your assessed value is less than you paid.

That is/or was the situation a number of years ago in Petoskey. Our house in Petoskey was assessed at a value of 95 to 100% of its market value. However, property on Walloon lake was assessed on values that were about 1/3 to 1/2 of the actual values based on comparable selling prices. I base this statement on conversations with property owners I know and people that sold their property for 3-4 times the value the assessed values were base on. (note, I know the difference between assessed values and fair market values and how they are related) In that case, the people in Petoskey were paying far more than their fair share of local school and county taxes. Then when the property tax laws changed, those low values were in fact locked in until they could be increased after subsequent sales.

The bottom line is that property assessments are as much art as science.
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Conis
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PostPosted: Wed Jun 01, 2011 3:54 pm    Post subject: Reply with quote

I helps to be bud's with the assessor?

At one time, property could be bought/sold for "$1.00 and other consideration". I think that in these times, they want fair market value and if it isn't that, they make it that. I recall there is a tax stamp on the deed based on "value". Forget who pay that... I think buyer.

Property bought through a real estate brokerage IS market value and usually not contested.

Lastly... be careful what you wish for. If you go to the tax tribunal and complain, you might get a reduction... or it could blow up in your face. Thinking of a local guy that got all warped because his taxable value was increased $300 for what was already ridiculously low to begin with. So off to the tribunal to rant.

Long story short, they agreed something wasn't right so sent the assessor back to take a closer look. Taxable value increased by about $40k. Plus fines for numerous improvements made over 20 years... w/out permits.

Whoops.

~~~~~~~~~~~~~
Walloon Lake. Not sure what township WL is in? It's more like it's own country or something. They make stuff up as they go along, because they can and appears they had a pretty good handle on bending the property tax rules.

As I recall, there was a township "boat launch" (lacking any other term) at the far end of the north arm. This was 20-25 years ago. DNR wanted to put in a decent public launch in the village. Didn't happen- blocked by red tape. Or at least was for several years. PRIVATE LAKE! Have enought $$$ and it makes up it's own rules.
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Sparty
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PostPosted: Sun Jun 05, 2011 12:26 am    Post subject: walloon lake park Reply with quote

Over the objections of many lakefront property owners, the township just open and new park on the North arm of Walloon lake next to the old boat launch/road end.
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Sparty
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PostPosted: Fri Jun 17, 2011 10:06 am    Post subject: Edit post Reply with quote

Sorry, just noticed my typos. Should read "Opened a new park".
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