Property taxes in Michigan - homestead VS non - homestead

Another reason to buy and close on home before May 1st.  You may be saying to yourself, well I do not qualify for the home buyers credit, so you are doing the lets wait and see what happens. With the anticipation of home prices dropping once again.

Well here in Michigan we have this lovely thing called NON-HOMESTEAD Property taxes.

May 1st is the dead line to file your Michigan Property tax exemption. 

Why should this matter to you?  Well the cost of property taxes will go up about 40% for non-homestead properties.  So homes that are owned by banks, owned by HUD or where the owner has moved and bought another home will go into non-homestead status after May 1st.  So when you (the owner occupant) buys this home in the non-homestead tax status, you will be paying these higher taxes till the following year, because you can only change this status at the beginning of the year............which means higher mortgage payments till you can get this changed. 

With some buyers the cost is so much greater it can make or break the sale.  So that 'good deal" is no longer the good deal as you may not be able to afford the mortgage payment based on non-homestead property taxes.

If you do wait to buy a home after May 1st - your lender or Realtor can look this up for you and tell you what you are getting into.  Make sure your lender gives you a good faith estimate based current tax status of the home.

On line questions and answers for homestead/non0homestead property taxes

Forms for property taxes in Michigan.

 

 

Michelle Gordon is a Realtor with Keller Williams Realty - Grand Rapids Michigan - voted the best Real Estate company by readers poll 2009 - 2010 in the Grand Rapids Magizine.  Focus on 1st time home buyers, Relocation and listings in the Kent County area.  You may find Michelle on facebook, twitter or linked in and she invites you to join her.