“In this world nothing can be said to be certain, except death and taxes.” Even back in 1789, Benjamin Franklin understood that taxes are here to stay. Before purchasing a property, educate yourself on how property taxes are assessed your area, how they might change after your purchase, and how you or your bank might be paying them. Here are a few tips for buyers in Washtenaw County:
- Property taxes are based on the taxable value of the property and the current millage rate for the area, all of which is public information. You can find taxable values for properties in Washtenaw County here, and 2016 millage rates for the state of Michigan here. The state of Michigan also has an online calculator for property taxes.
- Keep in mind that both taxable values and millage rates are subject to change, but taxable value increases are limited to the percent change in the inflation rate or 5%, whichever is less.
- The exception to this rule is during the year after you purchase a property. For properties sold during the past year, the cap is removed and the current year’s taxable value becomes the State Equalized Value (SEV) of the property. The SEV is based on 50% of a property’s market value.
- In Washtenaw County, Summer tax statements are sent by July 1 and are due on September 14. Winter tax statements are sent by December 1 and due on February 14. Penalties apply for late payments. On March 1 of each year, any past due tax balances are sent to the County as delinquent.
- Be sure to look for any special assessments that may apply to the property you are considering for purchase, and include who will be responsible for them in the sales contract. Will the current seller pay them off, or will the buyer be responsible for payments going forward? One example of this is the 10-year Scio Road Assessment that was implemented in 2013 and is payable in $85 installments each year.
- If you own and occupy a property (it’s your principal residence), you may qualify for a principal residence (homestead) exemption from a portion of local education taxes. Check with your city or township for additional information.
- If you obtain a mortgage to purchase a property, your bank will likely collect your property taxes from you in your monthly PITI payment (principal, interest, taxes, and insurance). You will pay 1/12 of your annual property tax due each month. The taxes and insurance will be held in an escrow account, and then the bank will pay your property taxes when they come due.
If you are thinking about buying a home and need help navigating property taxes in our area, call Ann Arbor’s Real Estate Specialists at The Bouma Group at 734-761-3060. You can also email us at email@example.com. Start your new home search here!