Bill, Home Buyer in 90210

How do I calculate the true market value of a home for property tax assessment purposes?

Asked by Bill, 90210 Tue Mar 17, 2009

We recently purchased a home in Grosse Pointe Park in December of 2008. We just got our tax bill and it went up. Its now about 40% higher than the price we paid in the non-foreclosure, arms-length transaction. We inquiring at the assessor's office, they indicated the proper time to look at for the comps was Oct 2007- Sept 2008. They also said there were so few forced sales, that they had a hard time coming up with comps for the neighborhoods so they just had to average the city as a whole.
I am just wondering, isn't our purchase and the appraisal the best evidence of the true market value of our home as of Dec 31, 2008??

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Good evening, Bill.

Yes ... you are right on track with what, "should," be the case. The way the law is written (as you seemingly know), is that property values can drop, while the taxes rise ... the, "pop-up tax," as if we needed any more taxes.

Most appeal boards have met over the last few weeks, as I have appealed to 6 different boards on behalf of clients. I fear you are too late at this point --- or did you appeal? You may have to wait until next year. Feel free to keep my name and number and call me next February after you get your assessment, if you like.

Derek Bauer, Associate Broker / Realtor
Real Estate One
Derek@DoorToDreams.com
Web Reference: http://www.DoorToDreams.com
1 vote Thank Flag Link Tue Mar 17, 2009
Bill:

The 40% caught my attention because that is the amount of the reduction for the Homestead Exemption. Is it possible the Homestead exemption had expired on the property when you purchased it? If that's the case, be sure that you have it filed as soon as possible.

If that's not the case, you should consider hiring an attorney and getting others involved. If what you describe is true, it's clearly a violation of the standards of assessment for the State of Michigan. I suspect, however, that the explanation you received wasn't complete.

As for using your purchase price and the appraisal, the short answer is yes BUT your tax bill isn't figured out that way. We simplify our explanation of what SEV is to say that it's about 1/2 of the likely sale price of the home, but the state formula is much more complicated than that. If you really want to dig into this, the link below should prove helpful.
1 vote Thank Flag Link Sat Mar 21, 2009
The real way, if challenged, is to get a market value appraisal based on comps from that date.
Getting comps from us (realtors) isn't always well received so one from an appraiser from that time period (they can back date) would be your best bet.

yes -- they do differ -- market value appraisal v. purchase appraisal.
0 votes Thank Flag Link Tue Mar 17, 2009
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