FIRST STEP – LEARN the DEFINITIONS
Key Definitions when you are going to appeal your Greater Kalamazoo property tax assessment
Board of Review
A panel of local independent citizens appointed to review assessments of taxpayers who believe their valuation is inaccurate or contains errors.
The local government entity charged with creating and adjusting assess-ments for every parcel of property in your community.
True Cash Value (TCV)
The actual value of your home, as de-termined by the local assessor.
State Equalized Value (SEV)
50 percent of the actual value of your home.
The capped value of your home. By law, increases in your taxable value are limtied to the inflation rate or 5 per-cent, whichever is less.
STEP TWO – DECIDE WHETHER YOU WILL APPEAL YOUR SEV, YOUR TAXABLE VALUE OR BOTH
You may appeal either your taxable value, SEV or both to the March Board of Review. Go to your local assessor’s office and obtain a copy of your worksheet or appraisal card for your property. This should list the size of your house, the type of construction, special features, etc. The worksheet contains other information such as style (ranch, colonial, contemporary, etc.) of your home, utilities, construction date, number of baths, fireplaces, and kitchen range hoods. Ask the assessing department to explain the document until you completely understand the abbrevia-tions and numbers. You can also obtain worksheets of similar properties which recently sold in the area which the assessor is using to determine the value of your property.
STEP THREE – CAREFULLY CHECK THE SHEET FOR ERRORS
Carefully check the worksheet for errors. The assessor may agree to change some of the information or figures at that time, or you may have to make your case with the local Board of Review. There should be a “percent good” calculation on your worksheet which shows you how much your house has depreciated. Usually the Michigan Assessor’s Manual requires that every property have a “percent good” calculation. If your house is ten years old, it will be about 90% good. Percent good is another factor to use when comparing your home with other homes (see #4)
STEP FOUR – NOTE ANY ERRORS ON YOUR TAX WORKSHEET FROM THE ASSESSOR
If your tentative taxable value increased by more than 4.4% above your 2009 tax-able value and you did not improve your home with additions, there may be an error. Call your assessor immediately and inquire as to why your taxable value increased by more than the rate of inflation. Remember, increases in taxable value that are not attributable to additions are capped at the rate of inflation or 5%, which-ever is less, until the property transfers. SEV is not capped, but must reflect 50% of your property’s true cash value (TCV). Either taxable value or SEV may be appealed to the Board of Review. Make sure that a Homestead (principal residence) Affidavit has been filed for your homestead. If you filed a Homestead Affidavit last year, you do not need to file a new affidavit this year unless you moved. Call your assessor if you have specific questions.
STEP FIVE – SEE IF THERE ARE REASONS TO DEPRECIATE YOUR HOME
As noted in Step 3, the “percent good” is the way an assessor depreciates the value of a home based on its age. For this reason, normal issues common to all homes of that age are not considered in the specifics on the assessment. however, many homes have problems that are not associated with general aging. Examples might be cracked foundations, wall construction problems, or poor masonry work. The impact of these problems on the value of the home should be specifically addressed. Therefore, it is necessary to perform a complete inside inspection of your home. Written repair estimates and photographs of structural damage are very good evidence of defects which could affect property value.
STEP SIX – NOTE CHANGES IN YOUR NEIGHBORHOOD
Location is the single most important feature which determines the value of your home. If you live near a major road, landfill, business, or industry, your home may be less desirable than the same home located in a purely residential neighborhood. You may live in a mixed zon-ing area which includes commercial, industrial, and residential property. You may have a well, septic system, or dirt road. Obtain copies of citizen complaints about area drug houses, rowdy party homes, and neighborhood eyesores. Tape record factory, truck, or party noise. If these characteristics have changed, they may contribute to a deteriorating value of your home and you should be able to show this to the board.
Step Seven – If you recently purchased or refinanced your home, determine whether your purchase price or your appraisal is lower than your assessment.
Providing this documentation to the Board of Review is not a guarantee, but will help strengthen your case.
STEP EIGHT – INFORM YOUR ASSESSOR ABOUT PERSONAL PROPERTY INCLUDED IN THE PURCHASE OF YOUR HOME
One of the most common mistakes home buyers can make is that they fail to inform the assessor of personal property and other valuable items which were included in the sale. Personal property items often included in a home’s sale price, such as furniture, curtains, washer, dryer, etc., are exempt from assessment. If you do not inform your assessor in writing about these items, your assessment may erroneously include this value.
STEP NINE – COMPARE YOUR PROPERTY TO OTHERS IN THE NEIGHBORHOOD, ESPECIALLY THOSE THAT HAVE SOLD
Comparable property assessments are one of the most important tools for a property tax assessment appeal. If comparable properties are assessed lower than yours, you may argue that your property is overassessed. Make your comparable study by asking for the worksheets of similar homes which have recently sold in your area. Check the assessed value, the state equalized value, taxable value, type of house, and zoning. Compare the TCV per square foot for these homes. Keep in mind that these comparisons should be made between similar homes (i.e., compare two stories with two stories, or ranches with ranches.)
STEP TEN – COMPILE ALL THE INFORMATION INTO A LETTER
The last step in the process is to put all your information into letter form. See the sample appeal letter that we have included on another page. Please note: this sample letter indicates many of the grounds for a reduced assessment. It is very unlikely that an assessment could be reduced by nearly one third, as illustrated by the Sample Letter, but every reduction is important.
If you would like to DOWNLOAD the STEP BY STEP GUIDE TO APPEAL YOUR PROPERTY TAXES in PDF FORMAT, CLICK HERE!
Be sure to contact the Veenstra Team if you are considering selling or buying a home. We are eager to serve and we will ensure that you have all the information needed so you can make the best choices for your family. You can call us at 269-350-5514.