Making a case to the tax man Property owners appeal for rate cuts

1. Making a case to the tax manProperty owners appeal for rate cuts JOHN WISELY, KATHLEEN GRAY and STEVE NEAVLING Detroit Free Press, March 28, 2010 http://www.freep.com/article/20100328/NEWS06/3280426/1322/Property-owners-appeal-for-cuts-in-property-taxes

2. Seeking Relief • Property values across Michigan fell hard in 2009, reducing tax bills with them, but many homeowners wanted more. • So, in city and township halls across the state this month, they’ve confronted the tax man seeking more relief. • Review boards heard thousands of stories of unfair treatment. • A typical one: My neighbors’ homes are as big and nice as mine but you say mine is worth $20,000 more, making my taxes higher? • After the protests, the boards decide who’s right: assessor or homeowner. Or maybe they compromise.

3. What does it take to beat the tax man? • For homeowners in Michigan, it's mostly about the comps -- comparable properties that have sold recently. Their prices, often broken down by a price per square foot, make the difference between winning and losing an appeal. • The overwhelming majority of homeowners in Michigan will get a tax cut this year because their home prices and, in most cases, their taxable values, sank. Still, many -- aware that homes in their neighborhoods are selling at amazingly low prices -- asked for even steeper reductions. • For simplicity, in the following examples, we have used figures that show what assessors say a property is worth, which is actually twice what the actual assessment is.

4. He did his homework • Location: Troy • Homeowner: Mike Kowalski • Purchase price and year: $280,000 in 1998 • 2009 assessment: $300,000 • 2010 assessment: $286,000 • His request: $256,000

5. One of the Smallest Colonials • "I'm the guy with one of the smallest colonials in the sub," Kowalski said. "I don't feel that's a bona fide reason to over-assess me." • The three-person board agreed, at the encouragement of assessor Nino Licari. • "He did his homework, boys and girls," Licari said. "I don't think you need to belabor it." • The board reduced the value of his home $15,000 to $271,000, which will reduce his tax bill about $260 a year.

6. How He Did It! • In making his case, Kowalski noted that he has the original carpet, his cabinets are from 1983 and his in-ground pool is 24 years old. • "We've got the pool valued at $8,000," Licari said. • When Kowalski asked board members if they had any questions, Borys Potapenko didn't hesitate. "Do you have a finished basement?" Potapenko said. • In Troy, hearings are in a small conference room at City Hall. Three board members and the assessor sit on one side of the table opposite the homeowners. Licari uses a laptop computer and a projector to display photos of the home, maps of the neighborhood and assessment documents. • Unlike many communities which inform residents by mail of their decisions, thereby avoiding facing angry residents, Troy gives residents an immediate answer to their face. • "It makes for a little more give and take," Licari said.