Property tax assessment limitations (caps on how much your home's value can increase for tax purposes in any given year) are again frustrating and confusing many homeowners. we've heard complaints in the past about such limits creating vastly different tax bills between neighbors, or about those limits creating inefficient incentives that discourage moving. Now we're beginning to hear complaints about those same limits resulting in tax increases even when home values are plummeting. An ITEP editorial published this week in The Detroit News explains why this new phenomenon is a predictable component of these limits, why ending the occurrence of tax increases in down-years (as has been proposed in Michigan) is a bad idea, and what states should do instead to provide a more reasoned and straightforward brand of property tax relief.
Fortunately, there are some Michigan legislators that are already ahead of the curve when it comes to this issue. Two bills have been proposed this year with the goal of improving the state's circuit-breaker, though both have yet to advance.