What Is Happening to Property Taxes in Detroit? - Mansion Global

Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.

Q: I heard that Mayor Mike Duggan’s new budget will reduce property taxes here in Detroit. If approved, how would the change affect homeowners?

A: Last month, Detroit Mayor Mike Duggan introduced his 2024-27 Four-Year Financial Plan, a $2.6 billion budget that marks a 6.5% increase in overall spending for the city. Two of the hallmarks of the mayor’s plan include a significant decrease in residential property taxes, along with an increase in demolition spending earmarked for the city’s many abandoned homes.

More: What Major Cities in the U.S. Have the Lowest Property Taxes?

The proposed budget would cut Detroit property tax revenues to the city by $2 million over the next two years. This would mean an average of $50 to $100 in savings for homeowners beginning in July 2023 and an average of $100 to $200 in savings beginning in July 2024. In his presentation to the City Council on March 3, Mr. Duggan noted that this was the first time in his memory that Detroit homeowners would see a tax cut. The mayor praised this development as an important turning point for the city. With an effective tax rate of 3.77%, Detroit’s property taxes are among the highest in the nation.

“Duggan’s budget proposal would mean significant savings for Detroit property owners, especially in a time when many are struggling financially,” said Boyd Rudy, team leader at MiReloTeam by Keller Williams Realty Living. “These measures could help stimulate the housing market in the city and make it more attractive to potential buyers.”

Detroit was recently ranked the most undervalued housing market in the nation. The median price for homes in Detroit is $73,500, down 14.8% since last year. In Boston Edison West, Detroit’s most expensive neighborhood, the median listing price in 2022 was $307,000.

More: Tax Day Is Approaching—What Deductions Can I Take on My Home?

Mr. Duggan called the budget, which will see the 10th consecutive increase since Detroit left bankruptcy in 2014, “historic.” The City Council is continuing to hear community and committee discussion on the budget, which is slated to be finalized later this month.

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