A real solution to Michigan property tax problems ....
This may be a very "on the surface approach that merely touches the surface, but in principle, I think it would work well. Below is an opinion editorial I wrote in a Michigan tax online forum:
Any one who is on the side that Michigan's property tax climate is good or "not bad" does not own a lot of property and is not a real estate professional. My name is Al Block. I am a RE/MAX agent in the Metro Detroit area. With out going into a lot of detail ... YET, "ad valorem" taxes in general are unfair. Here is the explanation that even the most liberal, tax-loving Michigander will agree with. Ad Velorem is a latin term that our property taxes are based upon ... based on the "value" of your property. If you study a tax assessor's field sheet, a majority of the value for your State Equalized Value which eventually trickles to your Taxable Value is the improvements to that land. Improvements are dwellings, out-buildings, and land improvements (driveways, walkways, decks, etc.). So, you take 2 property owners. The first guy/gal has a 1 acre lot with $50,000 of improvements. Another has a 1 acre lot with $100,000 of improvements. The 2nd person pays double the taxes. Please tell me why that would be fair. They BOTH own the same share of land in the city/township where they are located. They both breath the same amount of air, take up the same amount of space, it is just that the 2nd has more money. That is AD VELORUM taxation. Here is how Michigan, and many other states, can correct this issue. Property taxation would be based upon a property owner's fair share of the city/townships budget based upon their share ownership of land. Now, this proposal, I know would raise my own taxes. But what is right, is right. So, based upon my idea, if you own a 1 acre lot (using easy numbers here), you will pay half the tax burden as someone who owns a 2 acre lot, double your size, double your share. So, for simple math. If a city/twp. has a $100,000 budget to run all its services/government, and their are 100 land owners, all that has to be done is do the calculation of what their "share or stock" is in that city, and divy up the needed revenue. This way, there is no argument about taxable values, home values, or a big tax bill because some idiot builds a 5 million dollar mansion on a postage size lot. That idiot would still have the same taxes as someone who builds a 2 bedroom, 700 s.f. home on the same size lot. Why? Because their share of ownership of that town is the same. Think of it like a public corporation. If you own 100 share of stock, you have half the ownership value of someone who has 200 share of stock.
I welcome debate if I am way off on this one. I have not even touched the surface on how our current property taxation system hurts property values, limits investment, and drives people into financial ruin. All I speak/write of is from "in the trenches" experience being on the front lines of Michigan real estate. Until you help people buy and sell properties, you don't really see the impact.
Sincerely,
Al Block
Realtor/Appraiser
RE/MAX First, Inc.
1-800-SOLD-678