Preparing for 2021 Michigan Property Tax Appeals

For those who pay Michigan property taxes, the time to consider a 2021 property tax appeal has arrived.  Two of Michigan’s largest cities have sent assessment notices and, over the next month, virtually every other Michigan taxing jurisdiction will do the same.  Based on conversations with many Michigan assessors, notwithstanding the pandemic, there should be no surprise if many properties have value increases.

Whether an assessment protest must first be filed at the local level, in order to be able to appeal to the Michigan Tax Tribunal, depends on how the assessor has classified property.  A property’s assessment classification should not be confused with a property’s zoning.

For real properties that assessors have classified as industrial or commercial, appealing to the local boards is optional.  In contrast, properties classified as residential or agricultural must first be protested locally.  Taxpayers who are interested in protesting locally should quickly confirm appeal deadlines, which vary across the State.

The Proposal A “inflation rate” for 2021 is 1.4% which means that taxable values (on which taxes are based), will increase when a property’s state equalized value exceeds its taxable value (typically state equalized value and assessed value are the same and required to be half of market value).  For properties that were conveyed during 2020, no taxable value cap applies for 2021 and these new owners should be particularly aware of the potential for large increases, even while the pandemic is still creating so much hardship. 

Due to the pandemic, last year the Legislature extended the Tax Tribunal appeal deadline to August 31.  This was especially helpful to owners of commercial and industrial real properties, many of whom were challenged to timely file appeals last May while everyone was adjusting to our new normal.

Taxpayers should not count on the legislature’s granting additional time in 2021.  We recommend that taxpayers start working on their tax appeals as soon as possible in order to file well before the statutory deadline.  For real properties classified as commercial or industrial, the filing deadline is June 1 this year (the normal deadline is May 31, but that date falls on Memorial Day this year). 

If you have questions about this or any other property tax issue, you can contact Honigman’s Tax Appeal Group.