Detroit property taxes

Detroit's city council voted Tuesday to hire an independent evaluator to look at whether the city is assessing homes at their true market value. According to a property tax reform ordinance the Detroit City Council passed last year, that was supposed to happen this past February.

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By Michigan law, cities are not allowed to assess homes at over 50% of their market value. But a University of Chicago study concludes that Detroit continues to do so, and disproportionately to the lowest-value homes.

Mayor Mike Duggan said Monday that every residential neighborhood in the city saw home values increase in the past two years.

The program is called the Homeowners Property Exemption, or HOPE for short. It allows low-income Detroit households that own and live in their home to pay reduced property taxes, or in some cases no taxes at all.

The idea is known as a land value tax, or split-rate tax. It would drastically cut tax rates on structures, while more than doubling them on land. Duggan said that would give the vast majority of Detroit homeowners a tax cut.

The plan would tax land and buildings at different rates. Duggan is proposing a 30% tax cut on structures and a 300% increase on land.

The Coalition for Property Tax Justice said Attorney General Dana Nessel told them she would issue a legal opinion on whether the city can compensate some homeowners in cash or with property tax credits. The Coalition said that’s the appropriate way to redress historical property over-assessments that led to over-taxation, which helped fuel a wave of tax foreclosures in Detroit.

The Coalition for Property Tax Justice says data show Detroit continues to systematically over-assess and over-tax some homes—a claim Mayor Mike Duggan’s administration vigorously denies.

The average value of a Detroit home rose more than 30% in the past year. It’s up more than 60% since 2018.