Michigan's "Homestead property tax credit"....what a farce.

   / Michigan's "Homestead property tax credit"....what a farce. #11  
The best way to save on property taxes is to go somewhere where taxes are low to begin with.

The way Colorado calculates property taxes is to take the Market value value, multiply by 7.96% to get the assessed value. Then apply the millage. For Custer County Colorado that is 20.245. I'm sure you will find outrageous millages in some of the larger urban centers and anywhere there is empire building going on (tax/spend)

So, for a $100 000 property x 7.96% = $7960 Then apply millage: $7960 x 20.245/1000 = $161.15

For senior citizens who are over 65 and have owned the property for 10+ years, you get a 50% discount of the first $200 000 of property value. The same also applies for disabled veterans. It is a 1 time filing and does not have to be repeated annually.

If you keep livestock or lease part of the property for grazing, you can get ag status, in which case your property tax will probably drop to $50/yr or less over a 3 year phased in period.
 
   / Michigan's "Homestead property tax credit"....what a farce. #12  
The best way to save on property taxes is to go somewhere where taxes are low to begin with.

So, for a $100 000 property x 7.96% = $7960 Then apply millage: $7960 x 20.245/1000 = $161.15

Here in SE VA, the rate is $0.7515 per $100 assessed value, and the rate is set each year. So that same $100,000 assessment is taxed at about $750 this past year. For $100,000 assessment, that's about 3/4s of an acre with no buildings.

Keith
 
   / Michigan's "Homestead property tax credit"....what a farce.
  • Thread Starter
#13  
While I concur that it's possible to save on property taxes by relocating, just how many of those who advise relocating would actually go that route unless they HAD TO? I have lived in Central Michigan all my life, all my family and friends are here, all my live-in girlfriend's family and friends are in this area, I love my neighborhood and the privacy we have, I have too much crap to even consider moving, and I even have my long term care facility and nursing home and burial plot chosen.

One of the first to suggest I relocate lives in Tennessee, I had relatives there and they were always griping about the obscenely high sales tax rate which is one of the highest in the 50 states, and the 5% sales tax rate charged on food items.
 
   / Michigan's "Homestead property tax credit"....what a farce. #14  
JDgreen227, unfortunately, your attitude is EXACTLY what the local government people are bargaining on. I have seen this same scenario carried out in several different countries, all the same way. You are seeing the impoverishment of the American people happen right before your eyes and the benefit of a few. The community where I live, the median household income is $45k/yr, yet the smaller/older homes have a property tax of $2300/yr and the newer homes and those close to the lake are running $4000-5000/yr.

I will admit that I do not have close ties to the area, other than having lived here for the last 10 years. But regardless, it still costs me to move. The thing that has to be considered is that the low tax parts of the country did not get that way by accident. There are certain values that dominate in that area, and it is attracting more like minded people from across the country. If you live in Custer County Colorado, it is not because you are looking for free stuff. It is because you want independence and want to decide for yourself how your money is spent. Many volunteers serve on the county government and there are few salaried jobs. The only part that is subsidized is the school system since I'm sure the Feds regard it as flat out illegal to not comply with all of their mandates.

I have taken a subscription to the local newspaper to keep an eye on what has been going on in local news and there have been some pretty major showdowns between the voters and different "quasi county" boards, one being the local medical clinic and the other being the local airport authority, who thought that they could defy the voters because of getting some federal money to spend. In both cases, the people involved got fired, the airport authority got disbanded and integrated into the local council. The "new broom" NP who ran up a massive deficit in the clinic (and hid it) while going after certification to get more federal money was also fired and the entire certification process scrapped. There was an increase in the mill levy to correct a deficit to ambulance services that had been run for several years, as well as collecting on those who had not paid their bills.

The point is that unless people with certain values (specifically financial responsibility) band together, we are all going down the tubes to pay massive public service pensions, which include local government, law enforcement, firefighting, teachers etc etc. Thats in addition to the current spending on education and "programs" to support those who would rather not work.

In South Africa, my father saw their property tax and utilities increase by 1000% over the course of a mere 12 years. At the end of the 12 years, they had constant power outages and the water was not even fit to drink anymore. In Europe, many would find it hard to believe that during the transition to the Euro (which happened during the 3 years I was living there) the cost of many things doubled in Germany and in the less affluent countries like Spain, many common things increased in price by more than 3x. Of course after the short boom there has been a huge crash, but just imagine how those have faired who retired a couple of years prior to this enormous inflation ?

In Germany (where I lived for 3 years) at the company I was working for, we were all on a 40 hour work week, it was the status quo. In the year I left (2003) they adjusted the "calculated" work week to 35 hours and docked everyones pay by 12.5%. Yet the number of employees and the deadlines remained the same. At the same time, VAT was 6% and over the next 4 years it increased from 6% to 21%. Just imagine, after having about 60% in deductions from your pay before it even gets in your bank account, they take another 21% off anything that you spend ?

Its the old story of the frog swimming in the pot that is heated slowly....
 
   / Michigan's "Homestead property tax credit"....what a farce. #15  
While I concur that it's possible to save on property taxes by relocating, just how many of those who advise relocating would actually go that route unless they HAD TO? I have lived in Central Michigan all my life, all my family and friends are here, all my live-in girlfriend's family and friends are in this area, I love my neighborhood and the privacy we have, I have too much crap to even consider moving, and I even have my long term care facility and nursing home and burial plot chosen.

OK.....sounds fine. Live there, pay there.


One of the first to suggest I relocate lives in Tennessee, I had relatives there and they were always griping about the obscenely high sales tax rate which is one of the highest in the 50 states, and the 5% sales tax rate charged on food items.

We have a State rate of 7%....so does RI, NJ, NV, MS, IN, CA (7.5 there).

These States are 6% or better: AR, CT, FL, ID, IO, KS, KY, MD, MA, MI, PA, SC, WV.

Local option can put us at 9.75, exceeded by IL, AR, AZ, AL

Rates | Sales Tax Institute

BUT sales taxes you can control by what you buy. Income tax hits you before you ever see it.

Also, property taxes in TN are quite low. I have a 300k home and 75ac land + numerous barns/buildings. Taxes run $997.14 (looking at the bill laying here right now)

Over ALL, one of the lesser taxed States around.
 
   / Michigan's "Homestead property tax credit"....what a farce. #16  
My property was bought in 2006 for $203k. Now valued at $170k. Assessment was lowered to $190k and taxes are just under $4k/yr. Local millage is running $45.109 per $1000 of assessed value. There is a small exemption for a "primary residence" else I would have to pay several hundred more. Here in MI assessed value is 50% of market value. So the proper comparison to your number is $2.255 / $100 of Market value or 2.255% of market value per year.... Crazy.

Best part is that I live on a dirt road, get water from a well and am connected to a sewer system that is paid separately. If it snows, our road does not get plowed for several days and this year even the main service road for the entire lakefront subdivision (several miles) was not plowed for over 2 days. it was completely impossible to get out with a regular vehicle. Yet these are all households paying $4-5k/yr in taxes... Of course every year they have several items on the ballot to further increase the taxes, the most recent one was to rebuild the high school and when that failed to remodel the school, which passed. Superintendant of that school gets $170k/yr (the part of his salary and benefits that has to be declared by law).

Here in SE VA, the rate is $0.7515 per $100 assessed value, and the rate is set each year. So that same $100,000 assessment is taxed at about $750 this past year. For $100,000 assessment, that's about 3/4s of an acre with no buildings.

Keith
 
   / Michigan's "Homestead property tax credit"....what a farce. #17  
For the 35-odd years I have been paying property taxes, I wonder how many times I was told: "When you are older with a reduced income, you will get a break on your state taxes because Michigan has this Homestead property tax credit....."

Yeah, right. I finished calculating my state income taxes this morning, and I finally qualify for the property tax credit because of my reduced income. And for the calender year 2013, after being billed for property tax in the amount of $3300 I get a credit of $1200, which reduces my state income tax bill by the huge sum of $51.00. Know how much my property tax bill went up last year? $72.00!!!

Does your state offer a property tax credit in any form that reduces your state income tax, and is the credit actually enough to make it worth dealing with all the paperwork involved?
I am sure our wonderful governor tricky Rick Synder is all over this one trying to figure how to help get a few more bucks in his pocket?LOL.Don,t forget how high our car insurance rates are,another kick in the seat of are arse.Maybe we are paying for the Detroit bankpuptcy.The wife is retired and I am retiring next month.We are going take a hard look at selling our home and property & leaving Michigan.Last one out turn the lights out.LOL.
 
   / Michigan's "Homestead property tax credit"....what a farce. #18  
I live in Michigan and do my 85 year old MIL's taxes for her. She lives on social security alone - about $20,000. Until the homestead tax credit was modified, she got back about $1500 - nearly what her property taxes are. Last year she only got back $700, which for her was a huge financial hit.

I get a pension and the new pension tax hit is a big one for me and will also be for my wife when she retires. I plan to leave the state for a state with no income tax as soon as DW retires. I guess business taxes are lower here in Michigan now, though.
 
   / Michigan's "Homestead property tax credit"....what a farce. #19  
When wife and I turned 65 MI state income tax was no longer required. That law has been changed so that everyone will pay some income tax when they reach 65+. But people that were already getting the exemption were grandfathered. That's when the Homestead Property Tax Credit started to mean something. We get a little over $200 back each year from this credit.
 
   / Michigan's "Homestead property tax credit"....what a farce. #20  
Way back when first retired qualified for the Home stead tax deduction of $300.00 and it could not be raised.
Then the property was re appraised. value was double of past years so new tax increase then minus the $300 only increased my taxes to a few hundred more than the past.
Laws written by lawyers always have loop holes for politicians to get passed restrictions.
And this is property taxes not the state tax.
This State group is like the feds. nothing is enough 2013 tax table income of $0 to$100 tax is $1.00

Fascinating. If you have $0 taxable income, you still have to send them a buck.
 

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