miOaklandCounty.com » Taxes

Dmitry featured in Detroit Free Press

Maureen Francis — Thu, 08 Mar 2012 21:18:33 +0000

Dmitry Koublitsky spent 3 years working with his clients on a property tax assessment issue for a home in Bloomfield Hills. The issue went before the State of Michigan Tax Tribunal, which concurred with Dmitry and his client’s that their home was over-assessed and thus overtaxed. Dmitry’s clients recently received a significant refund for overpaid taxes. Here is the article from the Detroit Free Press.

Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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Now is the time to save money on property taxes

Maureen Francis — Wed, 16 Mar 2011 13:20:23 +0000

Every year about this time I write my annual post about Michigan property taxes. You get one chance a year to appeal them, and this is the time. If you bought your home in the last 12 months, take a close eye to where the assessment notice came in. There could be grounds for an appeal, and your purchase agreement along with a set of other recent sales could be all you need to get some tax relief.

Some local communities, like Birmingham, accept appeals by mail. All have appointment for their local boards of review.

Attorney Dave Nykanen is a property law and tax specialist and he recently penned this post, which will give you a guide to the overall property tax appeal system.

We gladly provide comps for our clients, so just give us a call if you are considering appealing. The worst board of review can say is “no”, but we often see at least a bit of savings for the homeowners who make the effort to present an appeal.

As I have said before, if you are selling, or planning on selling in the coming year, you should also be looking at your current assessment closely. An unnecessarily high taxable value could prevent a buyer from qualifying to buy your home, or make them scared off from tendering an offer.

It should come as no surprise that Oakland county municipalities are strapped for cash. Our system of assessing value did not have assessments fall as quickly as the market fell. It’s up to you, the property owner, to ensure that you are paying no more than your fair share.

Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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Homebuyers tax credit closing date extended

Maureen Francis — Thu, 01 Jul 2010 15:09:30 +0000

Extension of the home buyers tax credit was iffy, with it looking uncertain up until the final days before the credit was due to expire. Many buyers and sellers were sitting by nervously, with lender backlogs and other complications preventing them from making it to the closing table in time for the credit. Approximately 6,400 home buyers in Michigan alone would have been negatively impacted if the tax credit extension had not been passed.

Senate and House vote to extend tax credit to home buyersThe Senate and House have approved a plan to give home buyers an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring. It still has to be signed by the President. The consensus is that he will sign it today.

The move by Senate Majority Leader Harry Reid (D-Nev.) would give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to close the sale.

The proposal would only allow people who have signed contracts to finish later. About 180,000 homebuyers who already signed purchase agreements would otherwise miss the deadline.

Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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Relief for those rushing to close before June 30th for tax credit

Maureen Francis — Wed, 16 Jun 2010 22:55:48 +0000

Relief might be on the way for harried home buyers, mortgage officers and title companies who are rushing overtime to make sure they close before June 30th so that their home purchases qualify for the $6,500 and $8,000 tax credits that were offered on purchase agreements signed by April 30th.

Our market saw a frenzy of activity in March and April as buyers rushed to find homes and get them under contract. Multiple offers returned to the market and sellers delighted in quick sales. Fortunately, the market has remained at a very good pace even after the credit expired, and the uptick seems to be sustaining.

ANDREW TAYLOR
The Associated Press

(AP) — WASHINGTON – The Senate has approved a plan to give homebuyers an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.

The move by Senate Majority Leader Harry Reid would give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

The proposal would only allow people who already have signed contracts to finish at the later date. About 180,000 homebuyers who already signed purchase agreements would otherwise miss the deadline.

Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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Potential tax break for Michigan home sellers

Maureen Francis — Sat, 20 Mar 2010 20:13:59 +0000

Over the last few years, we have helped sellers save a bit of cash on transfer tax. The state legislature “rebranded” this law this week, but the savings to home sellers remained in place. We received the following from the Michigan Association of Realtors, outlining the criteria of qualifying for the transfer tax break:

Sellers may be exempt from paying the State transfer tax if the following criteria have been met:

The property must have been occupied as a principle residence, classified as homestead property;

The property’s State Equalized Value (“SEV”) for the calendar year in which the sale takes place must be less than or equal to the property’s SEV for the calendar year in which the seller acquired the property; AND

The property cannot be sold for a price exceeding its true cash value for the year of the transfer.

The title company actually collects less transfer tax at close, so it is important for a seller to make the title company aware of their eligibility.

Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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Homebuyer Tax Credit Deadline Looms!

Ken Mascia — Tue, 15 Sep 2009 18:30:20 +0000

In February the government amended and improved the first time homebuyer tax credit. Just to refresh your memory:

1) First time homebuyers will receive a federal tax credit of 10% of the cost of the home with a maximum credit of $8,000. You get the credit when you file your tax return for the 2009 tax year. It is possible to file an amended return for 2008 and get the credit sooner though.
2) A first time buyer is defined as anyone who has not owned a home in the past 3 years (including spouse)
3) Property purchased must be used as a principal residence (no second homes or investment properties)
4) Tax credit is refundable or will offset existing tax liability. Whatever your normal tax refund is you would get that plus the full amount of the tax credit.
5) The credit starts to phase out for individuals making more than $75,000 per year ($150,000 for a joint return)T
6) There is no repayment of the tax credit. However, if the home is sold in the first 3 years the entire amount of the credit is recaptured on sale of the property
7) Tax credit is available for qualified buyers through November 30th of 2009
The main message here is that you have to find a home and close on it prior to November 30th to qualify for the tax credit!
There has simply never been a better time to be a homebuyer. Homes are selling at great prices, interest rates are very low and if you qualify for the tax credit the government will give you up to $8,000 in cash simply to get out there and buy a house. What are you waiting for? Time is running out!

Written by Ken Mascia
Prime Capital Mortgage, 248.644.1200
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Breaking News: Tax Credit for Home Buyers!

Ken Mascia — Tue, 29 Jul 2008 21:40:53 +0000

I think we can all agree the housing market needs a little kick in the pants right now! Well, your Federal Government to the rescue. This week congress passed a Housing Rescue Bill which will attempt to do a number of different things from foreclosure avoidance assistance, tax credits to some home buyers and financial assistance to neighborhoods to buy and rehabilitate foreclosed homes among other things. The bill is expected to be signed by President Bush and if so it will be become law.

What I would like to focus on in this writing is the aid for home buyers. The bill offers first time home buyers a refundable $7,500 tax credit (or 10% of the homes purchase price, whichever is less) for homes bought between April 9, 2008 and April 1, 2009. There is an income limit of $75,000 for single filers and $150,000 for couples filing jointly. The tax credit is reduced or eliminated for home buyers whose earnings exceed these limits.

This is significant! If you buy a house for $150,000, and your income qualifies you for the full benefit, then you would get a tax credit of $7,500! A full 5% of the purchase price is given right back to you at tax time. Wow, that should get some buyers who are sitting on the fence something to think about. Housing sales rely heavily on the domino effect; when one person sells their home they go out and buy another house and then that seller can buy something new and so on. More buyers in the market could really relieve some of the pressures and expand home buying exponentially! This is a step that could really help to get things back on track.

Wait, there’s more . . . . . . Fannie Mae and Freddie Mac (everybody knows who they are now) recently announced that they will buy loans in “stressed markets” (Southeast Michigan falls into this category) with only a 5% down payment! Formerly, you had to put at least 10% down. Now, to get 5% down you have to be a pretty solid borrower – at least a 680 credit score and 45% debt to income ratios, stable job and at least 5% of your own money for the down payment.

So, a first time homebuyer can get a massive tax credit and buy a place with only 5% down with conventional financing! Get your megaphone out and start trumpeting this around town. If you know anyone who has been considering buying their first home now there are even more reasons why it’s the perfect time to make the move. Home prices haven’t been this low in about a decade; mortgage rates are still great, first time buyers get a big tax credit and can get conventional financing with only 5% down!!

Written by Ken Mascia
Prime Capital Mortgage, 248.644.1200
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Property Tax Relief For Those With Two Homes

Maureen Francis — Wed, 09 Apr 2008 22:44:56 +0000

I am clipping an interesting portion of an email just received from the Michigan Association of Realtors, witha bit of good news for those home sellers who are carrying two homes in Michigan.

Yesterday, Governor Granholm signed 3 significant pieces of REALTOR® supported legislation. First, legislation enabling home sellers to retain 2 principal resident exemptions for property still on the market after the seller has moved elsewhere in the state. The signing of this legislation is a huge step in aiding struggling sellers who have had homes on the market for over a year and have lost their principal residence status on that property.

House Bill 4215, now Public Act 96 of 2008 sponsored by Representative Ed Gaffney (R-Grosse Pointe Farms) enacts that the seller can retain an additional exemption for up to three years on property previously exempt as the owner’s principal residence if the following circumstances are met:

the property is not occupied,
the property is for sale
the property is not leased or available for lease
the property is not used for any business or commercial purpose

The Michigan Association of REALTORS® (MAR) was active in pointing out to lawmakers that the struggling economy in Michigan has forced several home sellers to relocate to other areas of the state, in some instances continuing to market a home that they have not lived in for over a year. As a result, the home was no longer treated as a principle residence and the homeowner lost the principal residence exemption. Retention of an existing homestead credit for an unoccupied home that is currently for sale would offer relief to sellers who have had to relocate for whatever reason. The MAR is grateful to Representative Gaffney for being receptive and following through on this very important piece of property tax relief.

I am left with a few questions after reading this.

If the seller has moved out of state, are they eligible as well?
Does this take place now? The May 1 deadline for removing or replacing a property tax exemption and having it impact the coming tax year is almost upon us, so some people may need to rush to replace the exemption.
Can a previously removed exemption now be replaced? I assume the answer is yes, but I don’t know.

Clearly, this is a great benefit for those who qualify. The audience is probably limited, at least in Metro Detroit, where we are seeing transferees leave the state. Also, many of those who would prefer to sell have turned to leasing in order to reduce their cash out flow each month. These reluctant landlords will not benefit either. This could actually help to reduce the number of rental homes coming to market, though I don’t think it will have a significant impact there.

Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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Transfer Tax Exemption Could Offer Some Relief to Michigan Home Sellers

Maureen Francis — Fri, 04 Apr 2008 02:28:08 +0000

The following is a reprint of an email we received tonight from the Michigan Association of Realtors. It’s actually the first I have heard of this exemption, and it is exciting. I am going to have to do a bit more digging to see what this actually looks like when it is applied.

Attorney General Mike Cox issued an important opinion this week clarifying the proper application of an obscure exemption contained in the Michigan Transfer Tax Act. The opinion, arising out of a request from Representative Martin Griffin (D-Jackson), should afford certain home sellers immediate financial relief as Michigan’s real estate market continues its road to recovery.

Exemption “t”, as designated in the Michigan Transfer Tax Act, sets forth that a seller may seek an exemption from paying the state transfer tax if the following criteria are met:

The property must have been occupied as a principle residence, classified as homestead property;
The property’s State Equalized Value (“SEV”) for the calendar year in which the transfer is made must be less than or equal to the property’s SEV for the calendar year in which the transferor acquired the property; and
The property cannot be transferred for consideration exceeding its true cash value for the year of the transfer.

With property values and corresponding SEV declining due to the struggling economy, home owners and real estate agents first took notice of the exemption’s possible applicability under the state transfer tax. However, absent an official interpretation, there was little awareness of its proper application.

The opinion from the Attorney General uses examples to show how the application would apply. One example illustrating application provides:

If the SEV of the principle residence when acquired in 2006 is $74,000.00 and the SEV when transferred in 2008 is $72,000.00 then criteria one and two above are satisfied. You can establish the true cash value by doubling the SEV at the time of transfer. In this case the true cash value is $144,000. If the sale price in 2008 is $140,000.00 then the sale does not exceed its true cash value. All three criteria are satisfied and the exemption would apply.

The Attorney General’s opinion provides immediate relief to home sellers already faced with the reality of declining value on their single greatest asset. The opinion also provides a uniform reading of the exemption that is necessary to provide consistent application among the various Registers of Deeds across the state as they are already receiving filings for the exemption.

Sellers should be cautioned that a request for the exemption that fails to meet all three criteria could bring a penalty equal to 20% of the tax assessed in addition to the tax due. Additionally, no similar exemption exists in the County Real Estate Transfer Tax Act.

Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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Taxes. Taxes. Taxes.

Maureen Francis — Fri, 28 Mar 2008 04:17:29 +0000

Source: ShutterstockWell, it’s really Millages. Millages. Millages.

I’m interrupting our series on Oakland County luxury homes today to bring you a post about property taxes. I was perusing a report on 2007 Oakland County Millage Rates and decided to see where we would find the highest property tax rates.

The winners:

Lathrup Village, where the homestead millage rate is: 56.0830

Oak Park with Ferndale Schools, where the non-homestead millage rate is 64.9183

I’ve uploaded the report so that you can do your own exploring of Oakland County property tax rates. Property taxes might help you decide where you’ll buy your next home.

Oakland County Millage Rates

Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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Birmingham School District Landlords, Didja Know…

Maureen Francis — Fri, 29 Feb 2008 04:34:15 +0000

The real estate market has turned many a hopeful seller into a reluctant landlord (or SellLord, as I have dubbed them). Yesterday I got wind of something I have never heard of before, though I can understand the motivation.

A new tenant went to enroll her children in the Birmingham public schools. The admission process is lengthy she tells me, and one of the things she was instructed to do was make sure that the landlord had rescinded the homestead exemption on the home. Well, in Birmingham and in most surrounding areas, there is a significant differences in the amount of taxes due on a non-homesteaded property. The school official told her that those funds are used for school funding, hence the district’s interest in ensuring that the exemptions are correctly rescinded.

Perhaps Birmingham has been doing this a long time. I don’t know. I also heard a rumor that either the school board or the district was researching all of the currently enrolled students living in rentals to make sure their rental home owners were paying non-homestead taxes. This is just an unsubstantiated rumor though.

Will the district enroll a student living in a rental where the homestead has not been rescinded? I assume they will. I also assume they *might* pursue some owners who have not properly rescinded, though it could be difficult proving when the property became tenant occupied if a tenant’s child was not enrolled in school.

It is a certainty that the schools and the municipalities need the funding that is due them in these tough economic times. As a property owner who has long paid non-homestead taxes I would like to think that others also willingly accept this responsibility when they rent out a home, even though I have never thought the property taxation method for non owner occupied homes was fair.

Birmingham Public Schools serve some residents of Birmingham, Beverly Hills, Franklin, Bingham Farms, Troy, Southfield, Bloomfield Hills and West Bloomfield. District Map.

Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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Property Tax Assessment Time Again

Maureen Francis — Wed, 06 Feb 2008 05:42:18 +0000

Just a friendly reminder that if you are concerned about your latest tax assessment, NOW is the time to be working on an appeal. Each municipality has it’s own review board with scheduled dates for presenting your case for appeal.You will need to appear in person. You should be armed with comparable sales and your purchase agreement if it was a recent purchase.

This year I’ve seen some strange assessments of neighboring houses that were relatively comparable. In Birmingham I saw 2 similar homes, where one had a 7% increase in its assessment and the other had a 7% decrease. Neither had transacted recently and they are within a block of each other.

You have a narrow window of time to contest your assessment, so get cracking!

Also, I haven’t received my assessment notice from the Village of Beverly Hills/Southfield Township, Will have to make a call to them tomorrow. Be proactive!

2007-09-02, Photo by echovein.com.

Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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