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It's Tax (Appeal) Time

It's Tax (Appeal) Time

March 15, 2016
It's Tax (Appeal) Time

This week, across northern Michigan, business owners and residents are lining up before their local boards of review to appeal their taxes – in most cases, property taxes. Whether due to an exemption they now qualify for or because they believe a piece of property has been valued too high, people have one chance for a local formal review if they don’t agree with the assessor.

Garfield Township Assessor Amy DeHaan says since 2003 the township has averaged 84 residential appeals annually – except for 2007 and 2008, which had 237 appeals both years. DeHaan, who joined the township in 2011, estimates 80 to 85 percent of those who come before its Board of Review are granted a reduction.

“Most of the time these reductions are due to sales, or errors discovered in our records – square footage may have been calculated wrong, or a full bath is really only a half bath … that type of thing,” says DeHaan. “Often the change is not significant.”

Fred Mawson has owned Corporate Tax Resources in Traverse City since 2000, helping commercial real estate owners save money on their property taxes. Occasionally that help will mean a hearing before the Michigan Tax Tribunal, an administrative court that hears appeals for all Michigan taxes, and the next level after the local boards of review.

“Income tax is black and white, but there is a lot of gray in property tax and it gets very emotional, very personal for some owners,” says Mawson, a commercial appraiser and assessor by training.

Among his staff of four is a full-time attorney for cases that go to hearings, or have other legal issues.

“Ninety-five percent are not a legal issue but a valuation issue,” he adds.

As was the case for residential appeals in the Grand Traverse region, commercial appeals hit a high point as the economy hit its low in 2008-’09. Mawson's office filed approximately 20 cases with the tax tribunal – with cases concerning everything from large commercial buildings to golf courses.

In 2014, that number had dropped by half and last year it was just four.

"This is the strongest region in the state for real estate values” says Mawson, of the biggest reason for that decline.

Local commercial realtor Dan Stiebel sits on the Traverse City Board of Review – with the second of two days of appeal hearings getting underway today.

Stiebel says the number of hearings can range from a few dozen to 100. Due to the volume, the board doesn't always have time to delve as deeply into an issue as the assessors can. The board can also get hung up when the case isn't clearcut or involves significant discrepancies in value.

He says if he happens to sell a property in the city (or anywhere, for that matter) for less than the appraised value, he always encourages the buyer to pay a visit to the local assessing office, rather than to wait until the tax assessment notice arrives in the mail.

Garfield's DeHaan says when she first joined the township, it had between 30 and 40 cases filed with the state tax tribunal, and some were multi-year protests from the crash of the real estate market. “Today, I have two,” DeHaan says.

When it comes to appeals, DeHaan says she always tries to understand where the owner is coming from in debating the value.

She says while she has to treat everyone the same and compare with the values of neighboring properties, “If the owner has facts, I really look at it,” she adds. “I don’t get married to my numbers.”


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