A Standard Appeal with Added Benefit
Auto Dealerships need a large space dedicated to showrooms and service / repair. These properties can be very difficult to value since it’s typically very nice in quality, but the use is limited to car sales and repair. Maple Hill Auto Group felt their taxes were too high, and they were correct. Our firm was able to obtain a refund for two tax years at an average of $40,000 per year, and lock in an annual tax savings of over $55,000 for each year going forward.
Renovations and Improvement Shouldn’t Double Your Taxes
Maple Hill Auto was entering into a renovation cycle, which is a great time to discuss value with an assessor. According to Michigan property tax law, value is added in the form of "additions" in the year following the improvements. For example, our client added a large amount of value to their parcel during the 2014 tax year, which would then be tacked onto their taxable value in 2015. This increase was going to drive up their already high taxable value, and greatly increase their annual property tax burden. Since our value appeal was already in place, the added value due to renovations naturally became a part of our value discussions. Cost doesn’t simply translate to value, and assisting to set fair values during your renovation can also help avoid future appeals.
Our Process Protected our Client’s Future Expense
We initiated the appeal in 2014, which was the same year the renovations occurred. After filing with the Michigan Tax Tribunal we initiated discussions of value with the Assessor and their representative. It can take 12 to 24 months to obtain a hearing date at the Tribunal, but we were consistent in keeping our value discussions alive. This eventually led to obtaining an appraisal and holding serious settlement discussions. In 2015, over 12 months after filing our appeal, we had enough solid market data to negotiate a fair market value and lower our client’s property taxes. With two tax years under appeal (2014 & 2015), our client was in position for a refund for two tax years, as well as locking in a low capped taxable value for 2016 and going forward.
The Results Were Big
The reduced values that resulted were huge, going from an assessed market value of over $8,000,000 to just $3,700,000. For the year after the improvements occurred, our client avoiding a huge increase of value from $8,000,000 plus improvements to just $4,200,000. The new market value of $4,200,000 (down from over $8,000,000) will be the basis for the taxable value going forward. This equates to large annual tax savings for our client.
Let’s Lock in Your Tax Savings
Our firm successfully reduced the current property taxes, a large tax savings in the form of a refund check for over payment, as well as negotiated a fair market value for the value being added due to renovations. The annual tax savings were over $50,000 per year and will be locked in for years to come. Contact us to discuss getting similar results for your property.
