Detroit home values increased an average of 20% in 2022; Individual tax increases capped at 5%
Homes all across Detroit are continuing a six-year trend of significantly rising property values, with increases larger than most surrounding communities, Mayor Mike Duggan announced today. Based on home sales data from the past two years, neighborhoods across the city saw an average value increase of 20% over last year. That rise in value will be reflected in an annual notice of property assessment changes for 2023 that will begin arriving in mailboxes next week.
It’s important to note that while average property values in the city have increased by double digits, homeowners are protected against large property tax increases. Under state law, the annual increase in property taxes is capped at the consumer price index (CPI) or 5%, whichever is lower, if ownership has not changed. With a higher than usual CPI this year of 7.9%, homeowners are protected from a tax increase of that higher amount. When a home sells, the cap is lifted, and the taxable amount adjusts to the State Equalized Value the year following the transfer.
“Home values in nearly every neighborhood have been steadily rising, allowing longtime Detroit homeowners to build new wealth, without significant tax increases,” said Mayor Duggan. “These numbers show that while there is still a more work to do, the city’s revitalization has reached nearly every corner of our city.”
Major shift from 2014-2023
When Mayor Duggan took office in 2014, the city’s residential values were in a tailspin and had lost an estimated $3 billion in value since 2010. To help struggling homeowners, Duggan announced a 22% cut in residential assessments in his first month in office, followed by further cuts in 2015 and a citywide reevaluation. In 2016, some areas of the city began to see modest growth in residential property values, however those areas were confined to downtown, midtown and a few strong neighborhoods.
In 2018, the City started experiencing across-the board gains in residential property values. Since that time, the residential property class increased from $2.8 billion in 2018 to $7.0 billion in 2023.
According to a comparison of online Equalization reports over the last four years, Detroit saw a 45% increase in value of all property types compared to 32% in Southfield, 26% in Royal Oak and 23% in Warren.
“Sustained property value growth provides greater stability not only in our neighborhoods but also for the city’s economy and revenues,” said Chief Financial Officer, Jay Rising.
Market sales determine assessed value
To determine this year’s assessment, the city examined more than 14,000 market sales across two years (April 1, 2020, through March 31, 2022) to compute the proposed 2023 Assessments. The Office of the Assessor also reviews aerial and street level imagery of properties to determine valuation. Below is a breakdown of this year’s assessed residential value changes across the city’s 209 residential neighborhoods defined by the Office of the Assessor:
- 17 out of 209 neighborhoods (8%) had an increase in value over 30%
- 106 out of 209 neighborhoods (51%) had an increase in value ranging from 20% to 29%
- 53 out of 209 neighborhoods (25%) had an increase in value ranging from 10% to 19%
- 19 out of 209 neighborhoods (3%) had an increase in value ranging from 1% to 9 %
- 6 out of 209 neighborhoods (3%) lost value ranging from -2% to -11%
**** Does not include the eight condo neighborhoods throughout Detroit***
Proposed Assessment Notices being mailed next week
Notices of proposed assessment changes will be mailed beginning January 17, 2023, to the City’s over 408,000 residential, commercial, industrial, and personal property owners, advising them of their proposed assessments for 2023. These are not tax bills. Actual bills will be mailed out at the end of June (summer) and November (winter) by the City of Detroit’s Office of the Treasury.
Deadline for assessment appeals extended
Under State law, property owners have the right to appeal the proposed changes. The proposed 2023 Assessments are tentative until the completion of the local review period in March and any possible changes from the Wayne County Assessment and Equalization Department in April.
Residents will have three weeks to appeal all assessments; the City of Detroit has permanently extended the Assessor Review from February 1 through February 22, Monday through Saturday. The Assessors Review appeal process encourages all property owners to take advantage of their right to question how their property is valued during this time. Appeals can be submitted online, by email, or by letter. Property owners can also submit their appeal in person Monday-Thursday, 8:00 a.m. to 4:30 p.m. at the Coleman A. Young Municipal Center, in the Detroit Taxpayer Service Center Suite 130. Anyone wishing to address the Office of the Assessor in person will have the opportunity to do so via teleconferencing or by appointment.
The March Board of Review, the second step in the review process, begins March 7 and ends March 25. Anyone who wishes to present to the Detroit Board of Review will have that opportunity. Teleconferencing is encouraged. Anyone with questions or wishing to challenge their assessments can email the Assessor’s office at [email protected].
Residential Property Owners must begin the appeals process at the Assessors Review. Commercial, Industrial, and Personal Property owners may, if they chose, proceed directly to the Michigan Tax Tribunal. The deadline to appeal directly to the Michigan Tax Tribunal is May 31.
To file an appeal by email A[email protected]
To file an appeal online, visit http://www.detroitmi.gov/PropertyTaxAppeal (available February 1 through 22 by close of business).
To file an appeal by mail, the appeal must be postmarked to the Office of the Assessor by February 22, 2023).
City of Detroit
Office of the Assessor – ABOR
2 Woodward Ave Suite 804
Detroit MI 48226
Help with property taxes for those in need
Through the Homeowners Property Tax Exemption (HOPE) program, homeowners can qualify for 10%, 25%, 50% or 100% reduction in property taxes, depending on household income. For more information on deadlines and to apply for HOPE, go to www.detroitmi.gov/HOPE.