Posted by Linda Juenger on 1/1/08 1:17pm
Msg #228492

Question for someone in Michigan (Detroit area)

I did a closing yesterday (New years eve). The borrowers were in IL visiting relatives. Property in Detroit. I saw on the escrow that there is a Summer Tax and a Winter Tax. What is that about? I didn't want to ask the borrowers as they were really talkers and had a hard time keeping them focused on signing the doc's. We could have been there forever if I had asked them. Just curious. I've never heard of a summer and winter tax. Is this a Michigan thing or a Detroit thing?

Reply by Elizabeth Soliday on 1/1/08 1:33pm
Msg #228493

It is a Michigan thing, though they are trying to get rid of the Winter tax all together. The winter tax is really low right now, I think it will be eliminated by 2009. They have homestead and non-homestead taxes. We own an income property there and non-homestead taxes are quite high ($3500?).

Reply by CF on 1/1/08 2:14pm
Msg #228496

Yes, we pay taxes 2 times per year here in Michigan. The summer is much higher than the winter tax. In my township the winter tax is due 2/14/08. The summer is due 9/15/08. They are billed out, like, 2 months before the due date. If you were to re-fi right now....part of your settlement would be winter tax- unless you proved to the TC that you had already paid them or they had already been paid out of ecsrow. I do not escrow- so I pay them when they are due not when they are billed. I never really thought about how other states billed out their property tax????? I have no idea why they do this. The only thing that I do know is if you buy a home in Michigan and you contest your new assessment- chances are you will get it lowered b/c of the value issues we are having. It worked for us and last year- we had them lowered to what the property owner was paying compared to 2000 values. The taxes are all over the board here. We live in a township that outside a bigger city- actually have the city name as a mailing address my taxes are 30% lower than if we lived in the city limits. I still have fire, police, the same schools, emergency and road plowing/ maintenance the same as the city does. We picked this sub- b/c of the township location and the taxes we would pay here vs. living in the city limits. Most metro- Detroit surburbs have a high tax base. Non-homestead values are sky high here in Michigan. Make sure you do your home work if you buy a vacation property here!!!!!! Just an FYI.

Reply by MikeC/NY on 1/1/08 3:41pm
Msg #228504

Just out of curiosity...

<< Non-homestead values are sky high here in Michigan.>>

What do you consider "sky high"?

Reply by CF on 1/1/08 6:27pm
Msg #228512

Re: Just out of curiosity...

Well, I am not a property tax expert . I only know about the 3 homes that I have owned and the 1 that I, almost, built. My current home was owned by a relocation company for 11 mos previous to us buying it. My property taxes are around $6500.00 per year.....when they were non-homesteaded for the relo co. they were around $12,000.00. We can access this information online here. So, to me, non-homestead is expensive. Also, our taxes are all based off taxable value and the milleage rate. The milleage rate differs, greatly, from city to city and township portions of the cities. Also, the home that we almost built was taxed at a higher rate than the city milleage rate for "type"of sub that it was. When we did some searching and pulled up homes in that sub they were paying between $12,000 and upwards of $18,000 per year in property taxes for homestead. So.....we called the city and got some conflicting information from them as why this sub would be so high and other that compared to it were not....needless to say...we did not built there and the people that did can not sell their homes b/c of the tax issues with this sub. Yes, taxes are supposed to be regulated, however, we found out that cities can charge for various improvements in subs and get around the standard milleage rate. IMO- the non homestead tax rates are high and I bet if you are buying in a vacation area they are even higher!

Reply by MikeC/NY on 1/1/08 7:44pm
Msg #228515

Re: Just out of curiosity...

That sounds like a very confusing tax structure - I don't understand the difference between homestead and non-homestead, or what a mileage rate is, because we don't have anything like that here.

I'm on Long Island, which is that funky looking appendage hanging off the coast of NY. We share the island with part of NYC, which has its own tax structure; the rest of us pay "general taxes" - county and town taxes (and possibly village or city taxes, if we happen to live within that boundary) which pay for basic services. The bulk of our taxes is for schools, which can easily be 2 or 3 times the amount of general taxes. $6K in taxes would be considered a bargain; $12K is not unreasonable, and you don't want to know what it goes up to in places like the Hamptons...

Reply by CF on 1/1/08 8:11pm
Msg #228518

Re: Just out of curiosity...

Mike- I can only imagine taxes in your area!!!! I am sure they would find my property tax to be a value. Everything in your area is expensive and costs more!!!!

Reply by Linda Juenger on 1/1/08 8:37pm
Msg #228519

Re: Just out of curiosity...

CF Do you mean millage not milleage? The millage rate for a town I looked up has a levey of per 1,000 of assessed value. Is that correct?

Reply by CF on 1/2/08 7:57am
Msg #228547

Re: Just out of curiosity...

Yes, I am sure that I spelled it wrong. Millage is correct. As for my surburb it is one that has high taxes. And the $12,000 per year was for non-homestead is based on 42 mills. Many cities are higher and lower than that. That is why I said- that the tax rates are all over the board here. You can buy a 20 acre plot with a house and barns- maybe 2 hours north of Detroit and and pay less taxes for 20 acres than a city lot, in some of the surburbs.

As for the way it is configured.....I have no idea on the math behind or the percentages they use. Just what I pay....and what I have paid....and what I know that others pay.

This is all west of Detroit.

Reply by Elizabeth Soliday on 1/1/08 10:10pm
Msg #228523

Re: Just out of curiosity...

Property taxes near Detroit $12,000/year? You've got to be kidding me, that's $1000/mo. are you sure you don't mean $1200? Mine are about $3500/yr. non-homestead taxes in Grand Rapids, what part of Mich. are you talking about?

Reply by Julie/MI on 1/1/08 10:15pm
Msg #228525

Re: Just out of curiosity...

We are on the same page, Elizabeth. Maybe CF is in Grosse Pointe or Birmingham....although Detroit has very high taxes as does Southfield.

I know we are at 23 mills and our taxes are about $3200 in Macomb Twp, with Utica School District, and Macomb with L'anse Cruse, New Have or Chippewa valley has much higher taxes than we do in Utica

Reply by Mia on 1/2/08 11:53am
Msg #228614

Yes Michigan has a Summer & Winter Tax.
Non-Homestead property owners pay higher Taxes (each County has different
mills for the non-homestead tax payers.... so, it's not even across the State).

My County has recently purchased a "Homestead Audit" program, to catch those
tax payers (or tax cheats) that are claiming their vacation / second home as their
principal residence. They have caught quite a few. This program obtains voting
records, income tax records and other documents.

Many home owners have been caught in an "escrow account bind".
Property owners in the State of Michigan, have been caught in one of the state's
earlier attempts to balance its budget. Starting on tax bills in 2005 and ending
with tax bills due through February 2008, one-third of allocated millages
across the state have been moved ahead each year by one tax billing cycle.
(which is a sneaky way of implementing a "tax increase".
So those people who have escrow accounts, have to pay extra money each
year, just to stay current with their property taxes.

Reply by Linda Juenger on 1/2/08 2:22pm
Msg #228666

Thanks for all the responses. I was telling my hubby about

the summer and winter tax and next thing I know is he is spending 2 hours on the net looking and reading about how this works. He was so intrigued by it and I got bored with it after reading the posts here. He always is looking at different states, cities, counties across the country at how they tax for Fire, Police and EMS. He is fire chief here and is always looking out for emergency people. He has a "numbers" mind and he thought this was quite interesting. One thing he did say is that "our" taxes where we live aren't as bad as everyone says they are. We are pretty lucky here in Southern IL.