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“Repair before failure”

September 18, 2012

So to speak…

What I mean here is the flip side, aka proactive approach to keeping property taxes inline is often to structure transactions to prevent “uncapping”. Uncapping, the lifting of taxable value to SEV – usually resulting in a tax increase – can be avoided in some cases with how you structure your buy/sell/transfer activity.

We have a few insights into this.

Back in the day, I was victim of an illegal uncapping by Tyrone Township, Livingston County here in SE Michigan. We refinanced our home and they reclassified my residence as a sale / uncapped/ and raised my taxes. It was years before I even noticed it. In light of these sorts of local activity, be it by accident or an intentional way to raise revenue, remember that even though these local gov’t folks work for you, you best be on your toes to check from year to year for such changes in your file.

If you’re not sure what you’re looking for, we will assist for a modest minimal fee.


If you’d like other perspectives, here’s a MI professional we like:

www.miproptaxlaw.com/#!services

After the passage by Michigan voters of Proposal A of 1994, structuring a real estate transaction to avoid an unintentional uncapping of the property’s taxable value has become critical.  Dave Nykanen has consulted with attorneys, owners, and accountants to avoid uncapping issues. As a result of his deep knowledge of property tax issues, Mr. Nykanen has developed several strategies and techniques to structure real estate transactions to minimize the property tax impact. Whether it involves entity transfers, joint tenancies, or other factual scenarios, recent Michigan appellate court decisions have provided even more opportunities for such planning.   Given those recent court decisions, and Michigan’s current economic malaise, now is the perfect time to engage in long-range planning to protect against future uncapping issues.

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