as I understand it we have some odd tax laws here in MI and I have just been blind sided by one that I need help validating.
As it was explained to me property taxes in MI are split into summer tax and winter tax, summer being the city taxes due 7/1 and winter being the county taxes due 12/1.
On the house I am currently making an offer on they are currently being charged non-homestead tax which is roughly double regular tax. I am buying the house as owner occupied as I will be living in the house while I rehab it.
The seller has just paid the summer taxes of aprox 3500.00, winter taxes are about 700.00
we will be closing in October. I was informed that the city taxes would be prorated and the seller would be responsible for taxes from 7/1 through 10/? and I would owe the ballance of the taxes from 10/? through 6/30 back to the seller at the rate he paid. It was also said that even though I would be residing in the house, I would have to pay taxes at the non-homestead rate until taxes are filed next may.
Depending on what county in Michigan you are referring to the taxes are usually paid by the seller and prorated from Jan 1 to the day you close.
The lender will set up your escrows to have enough in the account to pay that next winter bill.
Also Homestead rates are 18 mills per thousand better then non homestead rates. And yes you will have to pay the non homestead rate until May of 2006 the home stead that is in place as of May 1st in any given year stays that way thru the next 12 months.
Your lender can actually Set your escrows on the homestead rate because the July bill is the only one effected. The winter bill is usually the same. Michigan has always used the summer bill to pay the school mills so they charge about 3/4 of the bill in the summer and 1/4 in the winter.
We are now going to one tax bill per year so things are a little more confusing but it should not effect you much. They are only moving 5 mills per tax bill untill it is all in the summer.
It is our number one topic before closings…you are not alone.