For the first time in a half century, the City of Detroit is doing a citywide reassessment of all residential, commercial and industrial properties, and that could mean big changes for your tax bill if you live in nine of the ten districts.

According to officials, 95% of the city’s 220,000 residential properties will see a reduction of 5%-15% percent of their property’s assessed value.  The remaining 5% of property owners will see an increase of 5%-15% – and those increases are clustered in downtown and midtown, as property values are starting to stabilize and in some cases, increase in the city.

For instance, a recent report by the Detroit analytics firm, Dynamo Metrics and funded by the Skillman Foundation and Rock Ventures that was focused on home values near federally funded demolitions, showed occupied home values rose 4.2 percent on average between April 2014 and March 2015.

The reassessment follows a review of current assessments and actual home sales for the two-year period between October 1, 2013 and September 30, 2015.

“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 in a statement.  “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 reassessment was expected in the plan of adjustment as part of Detroit’s bankruptcy, so although there’s an expected short-term hit to the general fund, it was planned that there would be a 2% reduction in all real property values in Detroit for financial year 2016-17. Detroit CFO John Hill is betting that the lower assessments will help generate new growth, as well as increases in commercial assessments will offset some of the losses.

“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.”

Below is the anticipated number of parcels that will see a reduction, as well as those that will see an increase.

Percent Reduction No. of Parcels % of Total
5.00% 58,493 26.70%
10.00% 8,238 3.76%
15.00% 142.236 64.94%
Percent Increase No. of Parcels % of Total
5.00% 5,425 2.39%
10.00% 2,368 1.08%
15.00% 2,461 1.12%
 Total:   219,041 100.00%

2016 Assessment notices are being mailed this week and will start arriving in mailboxes soon. Residents will have the ability to appeal their assessment, and that process will run February 1-15 in Room 804 of the Coleman A. Young Municipal Center. Actual tax bills will be mailed in June and payments are due by Aug. 31.

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