Nickstone Member Username: Nickstone
Post Number: 58 Registered: 02-2006
| Posted on Wednesday, December 17, 2008 - 12:45 am: | |
Alright so I'm going to lay my cards out on the table... I find that most people I talk to know more about property values and property taxes, and the people on this board tend to know pretty much everything about everything as it pertains to Our City, so here's my question/situation. Business is good for me, income is fine. I have been renting in the city for quite some time and recently thought about buying a place, especially with what everyone talks about that real estate is a 'buyer's market' at this point. Anyhow, I went to a National City bank (where I do my banking, needless to say) to discuss getting pre-approved for a mortgage, which I heard is a good idea in going into a property search. The mortgage consultant I spoke to told me that, in no uncertain terms, he had "lived in Detroit for years" before he moved and "you'll never find a greater disparity between service provided and taxes paid than in Detroit" and that, while I was welcome to pursue my dream of home ownership in Our City, I would "definitely be left scratching your head about what you're paying so much in taxes for." Okay so, my open ended question is... what the hell? When/how did this happen and why are taxes apparently unreasonably high in Detroit, or are they? Was he wrong? I've rented all my life and this all is new to me, though I do know my brother is looking at lovely houses in Philadelphia at the moment and the property taxes don't even come close to touching those of Detroit. Which I don't get either. Anyway... ideas? Am I wasting my time/money investing in real estate in Detroit? |
Sparty06 Member Username: Sparty06
Post Number: 172 Registered: 03-2007
| Posted on Wednesday, December 17, 2008 - 12:50 am: | |
Look for properties with NEZ distinctions. I believe there are significant tax savings associated with these properties. |
Nickstone Member Username: Nickstone
Post Number: 59 Registered: 02-2006
| Posted on Wednesday, December 17, 2008 - 1:13 am: | |
I had heard that... but thank you! My question I think is more general... in the long run, are Detroit property taxes not representative of services provided? |
Ocean2026 Member Username: Ocean2026
Post Number: 82 Registered: 11-2008
| Posted on Wednesday, December 17, 2008 - 2:04 am: | |
Nick I live in Texas and that you guys pay more and receive less is obvious in every facet of of government. Detroit doesn't even have a free website where one can find ownership, taxes and basic info about a property. |
Eastsideal Member Username: Eastsideal
Post Number: 114 Registered: 10-2007
| Posted on Wednesday, December 17, 2008 - 2:06 am: | |
In a word: no. City government in Detroit is pretty much a wreck, and chronically underfunded. There are a lot of factors behind the high tax rates and broke city government in Detroit, and I'm sure folks will tell you all about them here, but the main reason is undeniably the enormous loss of residents, businesses, and homes over the past several decades, which has greatly reduced the city's revenue stream. Add to that an aging and ill- or un-maintained infrastructure, the vast size and scale of the city (which hasn't changed), the inefficiencies of underfunded, understaffed, undertrained, and undersupervised city agencies, a remaining population that is amongst the poorest in the country and growing poorer, and a real estate market that is declining to the point of near non-existence, and you have a recipe for high taxes with a bad return on your tax dollar. Even a city with significant problems like Philly doesn't really come close, as it has a rather stable core of middle-class, upper-middle class, and wealthy residents, and a reasonably healthy business sector all paying taxes in a city that is not hemorrhaging population. Having said all of that, you should move right on in. Things here can't improve without people who are willing to invest in the city and work to change the situation for the better. |
Gnome Member Username: Gnome
Post Number: 2169 Registered: 08-2007
| Posted on Wednesday, December 17, 2008 - 5:30 am: | |
https://treas-secure.state.mi. us/ptestimator/ptestimator.asp Nick, use the above calculator to get an estimate on what your taxes could be. The taxes on a house are determined by a Millage Rate, or Mills. In Michigan we are taxed on 50% value of a house, called the State Equalizaed Value, or SEV. In Detroit the Millage rate is 65.25% or for every $1,000 your home is worth (not what it sells for) you pay $65.25. In Grosse Pointe the rate is 41, in Plymouth Township, the rate is 27 or 21 or some such thing. Your banker is telling you the truth, we have high taxes and low service return in most parts of the city. Some neighborhoods are better served. The Barry subdivision where the Manoogian Mansion is located gets very fine services, other place where the swells don't live are underserved. The pre-approvial is very wise. A pre-approvial contract is almost as good as a suitcase full of dough. |
Detroiterbychoice Member Username: Detroiterbychoice
Post Number: 148 Registered: 04-2008
| Posted on Wednesday, December 17, 2008 - 8:50 am: | |
Nick, If you really want to move to detroit, talk to someone who works soley in the detroit area. I recommend Margaret Palmer. People from the burbs are not educated on the real estate issue. I got a 270k house, 5% fixed. Look for an NCHAMP loan, they apply to certain properties only but are 2% below market value. Since the market value right now is like 5% you could literally get a loan for 3% fixed. And make sure it is in a NEZ zone. My summer tax bill was like $1200, and my winter tax bill was $80. I also rented for a long time, and decided to set up shop in detroit. Figure it like this, you pay how much in rent every year your not getting back? If you could buy a house and sell it for the exact same price you bought it for, you are still better off than renting. Even if you loose money you could still be better off if you crunch the numbers right. You just have to be willing to commit for a couple of years. Hell, Buy my place. There is another house I want to buy in detroit. haha |
Danindc Member Username: Danindc
Post Number: 4061 Registered: 10-2003
| Posted on Wednesday, December 17, 2008 - 9:31 am: | |
quote:The mortgage consultant I spoke to told me that, in no uncertain terms, he had "lived in Detroit for years" before he moved and "you'll never find a greater disparity between service provided and taxes paid than in Detroit" and that, while I was welcome to pursue my dream of home ownership in Our City, I would "definitely be left scratching your head about what you're paying so much in taxes for." Is it even legal for the mortgage consultant to say this??? |
Novine Member Username: Novine
Post Number: 972 Registered: 07-2007
| Posted on Wednesday, December 17, 2008 - 10:08 am: | |
Can anyone dispute the statement? |
Retroit Member Username: Retroit
Post Number: 604 Registered: 04-2008
| Posted on Wednesday, December 17, 2008 - 10:49 am: | |
"How did this happen?" 1. Uneducated citizenry who will accept tremendous abuse from their most-honored leaders. 2. Corruption at all levels of city government. |
Ndavies Member Username: Ndavies
Post Number: 1620 Registered: 10-2003
| Posted on Wednesday, December 17, 2008 - 12:02 pm: | |
How can you dispute a statement that's 100% true? When your monthly mortgage payment equals your monthly property tax bill it is far too high. Taxes in Detroit are far too high compared with the surrounding area. This high tax rate is another reason for the low demand for housing in the city. It's a contributing factor that helps house prices in the city lag far behind surrounding communities. My recomendation is don't buy a house in the city without it being an NEZ property. Make sure you check to see when the NEZ is expiring. NEZs only last 11 to 15 years. Property taxes return to the normal rate when the NEZ expires. |
Cherry Member Username: Cherry
Post Number: 24 Registered: 09-2004
| Posted on Wednesday, December 17, 2008 - 12:39 pm: | |
Nick: Detroit was built for 2 million people, and then half the people, the leaders and most affluent, moved away. Remaining residents have to pay for the existing infrastructure. Tax laws in Michigan favor new construction. Detroit takes advantage of Michigan law by demolishing large swaths of the city and displacing existing residents for new construction and highways. Proposal A limits the amount that a city can raise property taxes on existing property owners. New residents subsidize older residents. The city has tried to address the problem by offering NEZs, but then new residents are also paying less than the cost of providing services. Here are some links that may be helpful: A brief explanation of Proposal A and the Headlee Amendment Wayne County Treasurer property database Wayne County Register of Deeds |
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