GRAND RAPIDS, Mich. — Michigan property owners are set to take a big hit to their wallets. Property taxes are on the rise this year, more than it has in decades. Property owners can expect to see a five percent increase in tax this year, and it could be worse if not for a state law.
In the 90s, Michigan passed a law putting a cap on how much property taxes could increase year to year.
"They said that the property taxes could rise at the rate of inflation or 5%, whichever is less," says Geoff Brown, broker and owner of City2Shore Gateway Group.
Since that law passed more than 25 years ago, this is the first time inflation has surpassed that 5% mark, and the first time for many homeowners property taxes will have that large of a jump.
"It's gonna be really rough on some people coming this year," says Brown.
So how can you be prepared? Real estate broker Tiffany Szakal, co-founder of The Local Element Real Estate Agency, says the first place to look is your tax assessment, which you should have already.
"Your assessor sent that out about two, three weeks ago," says Szakal. "And it'll say exactly what your property tax is based on, and what the multiplier is that they're using. So you can calculate it out directly from that letter."
Brown says because median home value has increased alongside tax rates, you'll also want to make sure your numbers are up to date.
"I think five years ago was somewhere in the, you know, 220 range, and now it's $310,000," he says. "If the buyer isn't asking the realtor and their lender, what are my actual taxes gonna be projected at? Instead of just looking at the old taxes, it's going to be trouble."
While property taxes aren't due until the summer, Szakal says its never too early to think ahead.
"You got a couple of months to plan," she says. "But right now the letters are out for you to start making those plans."
Both Szakal and Brown agree this tax hike will have a major impact on home affordability going forward, something they say is important to keep an eye on.
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