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Real Estate Alert: Is your property overvalued? Deadlines to appeal assessments in Ohio and Michigan are fast approaching

If the amount of the fair market value on your recent Ohio real estate tax bill or Michigan notice of assessment seems inflated or unreasonably high, you should consider a challenge to the value.

By now, many property owners in Michigan have received notices of assessment for 2012, and Ohio property owners have received real estate tax bills based on the value of their property. If you believe that your property was overvalued for tax purposes, you are permitted to challenge the fair market value, and potentially reduce your tax burden.

Ohio

Ohio property owners receive real estate tax bills based on the value of their property as of January 1, 2011 (relating back 12 months to the tax lien date). This value will be used to determine the amount of property taxes payable in the 2012 calendar year. If you believe the assessed value is not based on the fair market value of your property, you should consider an appeal to your local Board of Revision.

To appeal, an Ohio property owner must file a complaint no later than April 2, 2012 (normally March 31, which falls on a weekend this year). The process can provide significant tax savings. Property owners should ensure that they do not merely accept an unfair value without at least exploring their options.

Prior to appealing, there are certain items to consider:

  • For commercial property, in almost all circumstances, an attorney must sign the complaint
  • A party that makes an appeal of value based on a recent sale of property at arm’s length should provide certain documents in connection with its appeal. We can help identify the relevant and necessary documents to submit.
  • Is a “foreclosure sale” an “arm’s length sale at fair market value”?
  • Unless a specific exception applies, a party may only appeal its valuation once every three year triennial cycle (a recent arm’s length sale is such an exception), and therefore, one mistake could impact three years of taxes.
  • There are certain circumstances where an appraisal should be obtained in connection with the appeal.
  •  When cases are settled in an expedited manner, it saves time and eliminates uncertainty.

Between now and April 2, 2012 is the time to determine whether to appeal your Ohio real estate taxes. Do not wait until April 2 because you should consider all of the facts to determine if the appeal is appropriate and to file the required paperwork.

Michigan

In Michigan, property owners have or will be receiving notices of assessment based on the value of their property as of December 31, 2011. This value will be used to determine the amount of property taxes in the upcoming year. If you believe the assessed value of your property is not based on the fair market value, you should consider an appeal to the local board of review or the Michigan Tax Tribunal.

Residential property owners are required to first appeal to their local board of review. Unlike residential property owners, owners of commercial or industrial property may appeal directly to the Michigan Tax Tribunal. A commercial or industrial property owner who believes the assessed value is higher than the fair market value of their real property has until May 31, 2012 to file an appeal in Michigan.

Contact McDonald Hopkins

Our attorneys have experience representing clients in real estate tax appeals in both Ohio and Michigan. Furthermore, we understand how to advance an appeal through the Michigan Tax Tribunal. We have experience in Boards of Revision in all regions of Ohio and have litigated real estate tax valuation cases at the Ohio Board of Tax Appeals. If you would like to explore your options for an appeal, please contact:

Stephen K. Hall
614.458.0026
shall@mcdonaldhopkins.com

Jeffrey R. Huntsberger
216.348.5405
jhuntsberger@mcdonaldhopkins.com

Timothy J. Lowe
248.220.1359
tlowe@mcdonaldhopkins.com

Real Estate

We have an integrated team of attorneys who understand the challenges facing the real estate industry. We typically help clients acquire real estate, secure construction and permanent financing, negotiate architect and builder contracts, develop commercial and residential projects, and negotiate leases. Within our Real Estate Practice, our environmental attorneys combine regulatory, technical and business expertise to help clients meet the complex challenges posed by environmental laws and regulations. We service a wide range of clients in all aspects of compliance and transactional activities involving solid and hazardous waste, air, wastewater, underground storage tanks, site assessments, site remediation, voluntary cleanups, lender and corporate officer liability, wetlands, and asbestos.

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312.280.0111
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Fax: 614.458.0028
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Fax: 248.646.5075
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Fax: 561.472.2122
IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any tax advice contained in this communication (including any attachments), was not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding any penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction matter addressed herein.

© 2012 McDonald Hopkins LLC All Rights Reserved. This Alert is designed to provide current information for our clients, friends and their advisors regarding important legal developments. The foregoing discussion is general information rather than specific legal advice. Because it is necessary to apply legal principles to specific facts, always consult your legal advisor before using this discussion as a basis for a specific action.