Could there be a silver lining to the increasing number of foreclosures in Michigan? Maybe. Maybe not.
The State of Michigan just changed the laws allowing foreclosures to be taken into consideration in property tax assessments. Previously the depressed sales were disallowed as aberrations. In Oakland County areas particularly hard hit by foreclosures, like Pontiac, Hazel Park and Southfield, this could result in as much as an 8% decrease in assessments.
The State Tax Commission also changed rules allowing sales studies to be based on one year of sales instead of two. The two year ruling had helped to keep assessments low during periods of rapidly increasing sales prices, but it also kept assessments high during periods of rapidly falling prices.
Combined, these two changes could have a significant impact on assessments, but most home owners who have been in their homes for more than a few years will not see any difference in their taxes because of the current cap on property tax increases.
Figuring in foreclosures and doing one-year sales studies beginning next year will mean that overall residential assessments will fall even in wealthy Oakland County for the first time in at least four decades, said Dave Hieber, the county’s equalization manager.
He predicts 7,800 foreclosures in the county by year’s end. That, combined with falling prices in other home sales, will drive down property values an average of 5%, he said.
For more information read the article from the Detroit Free Press.
[tags]oakland county property taxes, oakland county foreclosures, property taxes[/tags]
photo by Ulleskelf