(WXYZ) — Where did they get those numbers?
It’s a question some metro Detroit homeowners are asking after receiving their property tax assessments in the mail this month.
If you've bought a house in the last year, you expect your home to be valued at around the amount you paid for it. You are taxed on half of that value.
What do you do when the city thinks your house is worth more than what you paid for it?
It happened to Mark Tade and his wife. They moved to Detroit from out of state.
“Love the vibe and the energy,” Tade says.
When their city tax assessment arrived, he says he expected their townhome would be valued near the price they paid for it, around $400,000.
“Instead, it was almost twice as what we paid! Over $800,000,” Tade says.
Which means a $21,000 property tax increase.
“The number is just so unrealistic, it’s almost laughable,” Tade says.
“I don’t know what they could have measured to come up with that assessed value for this property,” Tade says.
How are property tax assessments different from a mortgage appraisal?
“In a perfect world, assessments are 50 percent of market value,” says Dave Heiber, the Equalization Officer for Oakland County.
It’s not a perfect world.
“Because it’s a mass appraisal technique, the assessors in Oakland County have to value 500,000 properties on an annual basis,” Heiber says.
Heiber says the assessment process is the same for all cities and counties performing annual tax assessments.
The only way to assess all properties within a municipality in a short amount of time, is to group them into "neighborhoods."
“It’s a combination of physical characteristics and the sales within the geographic neighborhood,” Heiber says.
Home sales for the past two years within that neighborhood are averaged. That number becomes the base and then individual home values are scaled up or down to account for special characteristics like square footage.
The assessment is not going to be perfect.
So, what do you do if it’s too high?
“The first thing we suggest is to double check the accuracy of the physical record card to make sure the components the assessor believes are in your property are in your property,” Heiber says.
He says sometimes the square footage is wrong. That’s an easy adjustment to make.
If all the information on file for your property is correct, then you will need to find three recent sales of comparable properties nearby and call your city assessor.
“And if unsuccessful with the assessor, then to your local board of review members,” Heiber says.
If the assessor says no, you can still appeal. Property assessment boards of review meet in the beginning of March. Each city selects members of the community to sit on that board.
Tade reached out to the city of Detroit assessor’s office immediately.
“I’m hopeful they’re going to look and say this is obviously an error and correct it pretty quickly,” says Tade.
The City of Detroit tells 7 Action News that there aren’t many comps near the Tades' townhome, and in Midtown, properties are selling for more. That skewed the assessment formula. The city plans on lowering the Tade’s assessment.
The official deadline to file an assessment appeal was this past Saturday, but many communities will still accept appeals this week.
