For the third year in a row, most Detroiters will see a reduction in the assessed values on their homes when they receive their annual Notice of Property Assessment, Mayor Mike Duggan announced.
Twenty-sixteen assessment notices are being mailed this week and will start arriving in mailboxes soon.
The reassessment follows an exhaustive review conducted by Chief Assessor Gary Evanko and his staff of current assessments and actual home sales for the two-year period between October 1, 2013 and September 30, 2015.
The mayor, who has expressed his commitment to correcting assessments that for years have been too high, said that approximately 95 percent of the city’s 220,000 residential properties will see a reduction of 5 to15 percent of their property’s assessed value. The remaining 5 percent of property owners will see an increase of 5 to15 percent.
For many Detroiters, this could translate to a modest reduction in their annual property tax bill. It also means that as the city’s turnaround continues and property values rise, now is the best time to purchase a home in Detroit.
While these assessment changes are based on two years of data, a recent study conducted by Dynamo Metrics shows that in the past year property sale prices rose dramatically across most areas of the city.
Mayor Duggan said the convergence of the city’s rising property values and what may be the last round of large scale assessment drops has created the perfect climate for people interested in buying a home in Detroit.
“Right now there is a lot of interest in purchasing homes in Detroit and prospective buyers have a great incentive to buy now,” said Mayor Duggan. “As we continue with our neighborhood revitalization strategy, we expect property values to continue to rise. Eventually, assessments will follow. Buying a home in Detroit now will lock new homeowners into a taxable value based on this lower assessment.”
The impact of the lower assessments on city revenue is expected to be in line with the Plan of Adjustment, which projects a 2 percent reduction in all real property values for FY16-17, according to CFO John Hill.
“On an overall basis it is anticipated that the reduction in assessed values for residential properties will be a decrease of approximately 10 percent, although we anticipate this will be substantially offset by the increased assessments of commercial properties,” Hill said.
He expects that fairer property assessments will improve property tax collections.
“With many people seeing large assessment reductions, we expect to see an increase in the number of homeowners who pay their full taxes,” said Hill. “In the near term, we expect this move to keep more taxpaying residents in the city. In the long term, we believe it will help to bring in more new homeowners and help to start growing our residential tax base.
“With many people seeing large assessment reductions, we expect to see an increase in the number of homeowners who pay their full taxes. In the near term, we expect this move to keep more taxpaying residents in the city. In the long term, we believe it will help to bring in more new homeowners and help to start growing our residential tax base.”
Tax bills will be mailed in June and payments are due by August 31.