The Easiest way to save 50% on property taxes (or more) is to research the property tax rates areas have before moving. In my county alone there are 86 different permutations of what your tax rates can be based on township/city and school district. Most of the time people only think about the geographic region in which they are going to live, possibly tethered to a place of employment, but rarely do we look at the individual property tax variations across local townships and school districts. It’s absolutely amazing how close some of these boundaries can be to each other that have massive differences in property tax rates.
Save 50% On Your Property Taxes In Berrien County, MI
I spent some time investigating the areas in which there are substantially higher taxes and substantially lower taxes than others. In my county, the highest taxed area is Benton Harbor City, in the Saint Joseph school district with 46.3 mills, while the lowest taxed area is Chikaming township in the River Valley school district with 17.88 mills. These are respectively 2.3% and .9% of the value of the home. On a $100,000 home the Benton Harbor house would have a $2,318 tax bill and the Chikaming township house would have a $894 tax bill, that’s a difference of $1,424 per year.
$1,424 per $100,000 every year makes a big difference. For an average home of $150,000 this amounts to a difference of $2,136 per year. From a financial independence standpoint, a house in the highest taxed area of the county would require an extra $53,000 in savings at a 4% withdrawal rate to pay for the extra taxes.
As much of a proponent I am of buying a house in Benton Harbor, There are 31 different areas in Berrien County where one could save 50% on property taxes over living in the City of Benton Harbor within Benton Harbor or St. Joseph school districts. The silver lining is that currently property values in Benton Harbor are quite low when compared to these other areas, so even though you may pay a higher percent in property taxes, the property will most likely cost quite a bit less than a similar property in one of these other areas.
Here’s a full breakdown of Berrien County Property Tax Rates, which I acquired from out County Treasurer’s website:
One of the interesting things I noticed is that there is not an inverse relationship between property tax rates and large corporations. For example, in Bridgman, MI, which is a very small town with a population of 2,270 people, there is a large 2 unit nuclear power plant that employs over a thousand people. In Benton Harbor, MI, also a fairly small city, with a population of just over 10,000 we have the world headquarters of Whirlpool Corp. Which also employs thousands of people. With these large corporate bases, one would think the property tax rates would be lower, but that is not the case. Benton Harbor has the highest tax rates in the county, and Bridgman is also on the higher range.
Choosing the location of your home on a local level is a significant way to save money on your property taxes. Other key options to reduce your property tax costs are to buy less expensive houses, file a principal residence exemption, challenge your assessments, and vote for lower taxes (which also goes hand in hand with reduced services).
Have you looked at the differences in local tax rates when buying a home?