Many look to lower property taxes

WEST MICHIGAN (NEWSCHANNEL 3) - The values of homes nationwide, and in West Michigan, have taken a major beating over the last year as part of the economic collapse.

Statewide, the value of homes in Michigan dropped 16 percent from 2007 to 2008. In Kalamazoo, the drop was a little over ten percent. The drop in the Grand Rapids area was more drastic, down more than 16 percent, and Battle Creek saw a drop of 18 percent and we may not have seen the floor yet.

Even as home values decrease, your property taxes may still see an increase.

There's been talk in Lansing about changing the way the state taxes property, perhaps stopping tax increases on homes that don't go up in value, but if state legislators and the governor don't do it, few people realize they have the ability to challenge the system as well.

To beat the local assessor you have to understand the system, which is something many homeowners just don't get.

Across the state, homeowners are watching home values go down, while taxes remain the same.

"It would be worth it if the the house went down 25 percent, if you can knock your tax bill down 25 percent it would be worth it for sure," said property owner Scott McLean.

With the tax system currently in place, it's not easy to change your taxes, you have to appeal with your local government to get the bill down.

"So if you think you have a case, it absolutely makes sense to do a little bit of digging in the public records to see what homes sold for in the neighborhood," said Christian Meyer, a real estate attorney.

The basics of the system are as follows; property tax limits were put in place by Proposal A in 1994, since then every house has two values, the actual value based on the market and a taxable value to pay property taxes. The actual value is 50 percent of what you can get on the open market, and the taxable value is capped to a small increase every year, so if the actual or assessed value is lower than the taxable value, experts say you should appeal.

"Certainly for people who have bought their homes more recently and seen a significant loss in value, it may be that their assessed value, which would be half their true cash value, is lower than the taxable value," said Meyer.

Tax notices will be arriving by mail in the next several weeks, a very important document to determine what a home is worth.

Several attorneys who handle these types of cases say they had more appeals in 2008 than the previous five years combined and expect to see even more in 2009.