Last Friday we received our yearly property tax assessments in the mail. Usually these show the value and thus the taxes on the property going up every year. Imagine my surprise when I saw that they actually cut our tax bill! I’m curious as to how often this happens.
The taxable value of our home was dropped by around 15%. The two side lots we own were dropped by 10% each, This results in a total yearly savings of around $160. Not bad for not having to do anything! I’m still waiting on the assessment from our other house to come through. If that falls by a similar percentage I could end up saving a total on all our properties of $250 a year; of course with my luck the assessment will go up enough to make the savings on my primary residence a wash.
In the past I have been able to get property taxes lowered by filing a form with our assessor’s office. When I had purchased a house at the tax auction several years ago the house was assessed at being worth over $47,000, in reality it was worth less than the $6,000 I paid for it. A simple e-mail to the assessor’s office led to them coming out to re-assess. Although they did not drop it to the $6,000 I was lobbying for, they did cut it down to $15,000, which saved me around $1,000 a year. Typically when a home is sold the sale price becomes the new assessed value. This isn’t the case with houses bought at auction.
It’s great that my house is actually assessed at less than the actual value of my house. For several years both of our houses have been assessed higher than what I could actually sell them for. What’s really great about this is that even if they want to increase the taxes in the years to come, they are limited in their ability to do so. In Michigan property taxes can only increase by 5% or the rate of inflation, whichever is lower. This year the inflation rate was 1.3%, so the best they could have done was increase our taxes by 1.3%. It’s shocking to me that not only did they lower our assessment, but that it was lowered by such a large margin.
Do you get a property assessment every year? How has yours varied over the years? Have you EVER seen them cut your assessment?