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Oakland County Michigan Home Buyer- How to Calculate Your New Property Taxes

Right now in Oakland and Lapeer County Michigan many houses are assessed higher than their true market value. Many home buyers are under the false assumption that they will only be stuck with that tax for the first year. That the new assessment will be half the sale price. This is not correct!

When I show you houses, one of the sheets attached to the listing is the public record report for the house that is available through our MLS. This public record sheet (or PRD) will give the taxable value and the state equalized value as well as the annual tax amount.

The taxable value is the number used to calculate your taxes. The taxable value times the millage rate equals your annual tax bill.  Upon transfer of deed (sale) the SEV will become the new taxable. In this market there’s a good chance the SEV will be higher than half the sale price.

I showed a house the other evening that is listed for $278K. The SEV and the taxable are both $163,610. Multiply that by 2 and you will be taxed like your house is worth $327,220. That is going to make a difference on your monthly payment.

This isn’t to say your assessment won’t drop next year– state law states that the assessed value is to be one half of the assessor’s estimate of market value of your property, and that the taxable value has to be less than or equal to the assessed value. And once ownership is transferred, and a new taxable in place, that taxable value is capped at 5% or the rate of inflation- whichever is less.

Many townships are dropping assessments across the board. The house in the above example was assessed at $198,670 in 2006 and has dropped each year since. You may also fight your assessment through your township and appeal to the state if you are not satisfied with the results.

For the purpose of determining what your costs will be when purchasing a home, you should figure the worse case scenario and figure your new payments based on a tax amount that uses the SEV plus 5%. When your taxes end up lower- treat yourself! Or put it against the principle of your house.

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More Information About Buying In Oakland County MI

Financing

The Home Inspection

Jackie Hawley
Cell: (248)736-6407

Jackie@JackieHawley.com  

www.MiRelocation.com 

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What Exactly Are Lakefront Taxes?

I’m in the middle of a home search for a buyer transferring to Oakland County Michigan. I came across a listing that states you can get lakefront home without the lakefront taxes. In reality it’s an off the water house with a separate parcel on the water with a dock, but that’s not the issue. The issue is- What the hell are lakefront taxes??!!

Taxes in Michigan are based on the taxable value. The taxable value is based on what the state equalized value (SEV) was at the time of purchase. The SEV is supposed to equal half of market value. There is NOT EXTRA TAX FOR BEING ON A LAKE!! Your assessment may be higher than if you live in the same house off the water. MAY be higher. The same house on 20 acres may be valued higher than if it were on the lake and taxed accordingly.

At times I have buyer clients comment about paying lake taxes. I understand when someone who doesn’t earn a living selling real estate has misconceptions about how homes are taxed. However, it is inexcusable when fellow “professionals” don’t know what they’re talking about and even go so far as to publish their ignorance for all to read.

Jump ahead a day. After writing what’s above I have spoken to a few Realtors who I respect ,and a couple of them thought there was a higher tax on the water. So I called Independence Township to verify. Got laughed at and told there is no special tax for living on a lake- just an assessment to reflect the value of living on the water.

For more about calculating your new property taxes when you purchase your home

How the current taxes can affect your buying power

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Jackie Hawley, Realtor
ReMax Encore, Clarkston

Cell: (248)736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

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It was the best of times (when your house was assessed). It was the worst of times (now)… it was the epoch of belief, it was the epoch of incredulity… it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us…

Two houses in Oakland County Michigan– both priced the same. Both in the same township with the same greedy bloodsucking tax revenuerstax base. The difference- The tax amount. To the tune of a tad over $2800/year or $235/month. This is not chump change and it is very important.

When you get pre-approved for a $300,000 sale price, the loan officer had to use some number for taxes. In reality, when you get pre-approved for a mortgage, you’re really getting pre-approved for a maximum house payment amount.

In the example above, the difference in taxes is because of the assessments and the fact that one of the houses is in the village and has a village tax. Both are on the same lake. So- how does the that $2800 additional annual tax affect your buying power?

To make the math easy, I’m going to assume an interest rate of 4 3/8%. At a 4 3/8 per cent interest rate $5=$1000 of sale price. Or annual tax. A difference of $235 in house payment equals about $47,000 in purchase price. OR– house A with higher taxes would need to sell for $47,000 less than house B in order to have the same monthly house payment. Or- you can pay $300,000 for house B and have the same house payment as you would if you paid $253,000 for house A.

When I show you houses, attached to the MLS sheet is the public record that gives recent tax information and an assessment history. This will also help you determine what your new taxes will be. So when we’re looking at things like size, location, price, we also need to pay attention to the property taxes.

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Southeast Michigan Home Buyer- How to Calculate Your New Property Taxes

Right now in Oakland and Lapeer County Michigan many houses are assessed higher than their true market value. Many home buyers are under the false assumption that they will only be stuck with that tax for the first year. That the new assessment will be half the sale price. This is not correct!

When I show you houses, one of the sheets attached to the listing is the public record report for the house that is available through our southeast michigan real estate property taxesMLS. This public record sheet (or PRD) will give the taxable value and the state equalized value as well as the annual tax amount.

The taxable value is the number used to calculate your taxes. The taxable value times the millage rate equals your annual tax bill.  Upon transfer of deed (sale) the SEV will become the new taxable. In this market there’s a good chance the SEV will be higher than half the sale price.

I showed a house the other evening that is listed for $278K. The SEV and the taxable are both $163,610. Multiply that by 2 and you will be taxed like your house is worth $327,220. That is going to make a difference on your monthly payment.

This isn’t to say your assessment won’t drop next year– state law states that the assessed value is to be one half of the assessor’s estimate of market value of your property and that the taxable value has to be less than or equal to the assessed value. And once ownership is transferred and a new taxable in place, that taxable value is capped at 5% or the rate of inflation- whichever is less.

Many townships are dropping assessments across the board. The house in the above example was assessed at $198,670 in 2006 and has dropped each year since. You may also fight your assessment through your township and appeal to the state if you are not satisfied with the results.

For the purpose of determining what your costs will be when purchasing a home, you should figure the worse case scenario and figure your new payments based on a tax amount that uses the SEV plus 5%. When your taxes end up lower- treat yourself! Or put it against the principle of your house.

Jackie Hawley
Keller Williams Realty
cell: 248-736-6407
email:
Jackie@JackieHawley.com

web: www.MiRelocation.com
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