GRAND RAPIDS, Mich. — Just like groceries, gas and mortgage rates, expect to see a higher price on your summer property tax bill.
The increase is mostly due to inflation. The State of Michigan uses inflation to calculate the Inflation Rate Multiplier. This year, it is capped at 3.3%.
That means your property taxes are increased 3.3% this year.
"Let's take today's pricing, 3.3%," said John Glovensky, City Treasurer for Grand Rapids, "My tax bill went up $100."
That 3.3% rate is set by the state, but it is capped at 5%. So, even with inflation increasing, those rates cannot get too high.
However, property tax rates have been going up for many years, but at a lower rate, typically in the 2% range.
"If I look back historically over the years, mine has gone up $30 to $60 pretty consistently over the years," said Glovensky, "Except for 2010, 2011 and 2012 when we saw it flat or decrease because of the housing crisis."
The other major driver in increased property taxes is increased property values. Angela Worth, a realtor with Bellabay Realty of Grand Rapids, said West Michigan property values are finally catching up to the nationwide average, where they had been lower for many years.
It is important to be prepared for property taxes, especially for first time homebuyers. Worth said she always explains what to expect to her buyers.
"When their loan is taken into consideration, it's based on last year's tax rate," said Worth, "When you buy a home, you're now going to have a different assessed value. It usually doesn't catch up with you until a year later, through the township office. But that's when you're seeing that jump in taxes."
In Grand Rapids, summer property tax bills went out in the mail on July 1, and should be paid by July 31. Payments can be stretched out over a longer period of time, but with interest.
Of course, with prices skyrocketing across every industry, budgets are tight. Glovensky said inside resident's bill is an insert with options to help pay. He also said residents can contact the City, or go online to grandrapidsmi.gov for more options.
"Plan ahead, budget ahead, talk to your agent, talk to your lender," said Worth. "Know what you are going to be looking at in the next year when your home is reassessed based on your taxes, and based on what your house is worth now."
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