Property Tax Resources

1 hour and 9 minutes reading time (13706 words)

Michigan Property Tax Updates

UPDATED september 2019

Michigan Property Taxation Traps Another Taxpayer

Since the enactment of Michigan’s Proposal A over two decades ago, many a property taxpayer has unexpectedly suffered a tax increase that might have been avoided with better tax planning, and/or more effective advocacy in a tax appeal. Michigan property transfers can be especially painful. Property taxes are based on a property’s taxable value, and generally, taxable values are capped to the lesser of inflation or 5%, except in the year following a transfer of ownership. In that year, the taxable value is uncapped to equal 50% of the true cash (market) value.

On September 12, 2019, the Michigan Court of Appeals issued its most recent transfer of ownership decision in the case of Puppy’s Cubby v City of Farmington Hills. This case involved a transfer from a husband and wife as joint tenants, to a limited liability company of which the husband was the sole member.   The taxpayer claimed the transaction was not a transfer of ownership because it was between commonly controlled entities. The Court ruled in favor of the City, finding that under the joint tenancy the husband did not have control, rather the husband and wife had equal control. Consequently, the Court concluded that the joint tenancy and the limited liability company were not entities under common control.  

The outcome in this case is very troublesome. The taxpayer’s objective was to transfer property that was jointly owned by spouses, into an LLC owned by one of the spouses, without having the taxable value uncap. The Legislature has unambiguously provided that a “transfer of ownership” does not include a transfer between spouses. Yet, the subject transfer resulted in the uncapping.

Taxpayers have options in how they structure their transactions, and in how their tax appeals are pursued. The unfortunate outcome in this case confirms the importance of taxpayers working with experienced property tax legal counsel in planning property transactions, and in having property tax appeals pursued.  

Mark Hilpert and Stewart Mandell
Honigman LLP
American Property Tax Counsel (APTC)


Massachusetts Property Tax Updates
Minnesota Property Tax Updates

American Property Tax Counsel

Recent Published Property Tax Articles

Achieving Fair Taxation Of Big Box Retrofits

Issues to address to ensure a big box retrofit doesn't sustain an excessive tax assessment.

As more and more large retail spaces return to the market for sale or lease, creative investors are looking for ways to breathe new life into the big box. These retrofits saddle local tax appraisal districts...

Read more

Beware of New Property Tax Legislation

​Many states are attempting to change established law, causing commercial property taxes to skyrocket.

No one wants to be blindsided with additional tax liability. This is why many businesses belong to industry groups that closely monitor liability for income taxes. Unfortunately, these same companies rarely stay on top of legislation that...

Read more

How to Reduce Multifamily Property Taxes

Take advantage of the following opportunities for tax savings in the booming multifamily market.

With healthy multifamily market fundamentals and increasing demand from investors, apartment property values are on the rise. For owners concerned about property tax liability, however, there are still opportunities to mitigate assessments and ensure multifamily assets are...

Read more

Member Spotlight


Forgot your password? / Forgot your username?