As Ann Arbor continues to experience growth and rising property values, understanding property tax changes and assessments becomes increasingly important for homeowners and investors. In 2025, adjustments in tax policies and property valuations are expected to reflect the city’s evolving real estate landscape.
Understanding Property Assessments
Property assessments in Ann Arbor are conducted annually to determine the market value of residential and commercial properties. These assessments serve as the basis for calculating property taxes. In 2025, the city’s assessors are expected to account for increased housing demand, ongoing development projects, and infrastructure improvements, resulting in higher property valuations across several neighborhoods.
Homeowners in areas experiencing rapid appreciation, such as Burns Park, Kerrytown, and Ann Arbor Hills, should anticipate noticeable increases in their assessed property values. While this reflects the desirability and growth of these neighborhoods, it may lead to higher tax bills.
Anticipated Tax Changes
The city council is currently reviewing proposals aimed at adjusting property tax rates to balance rising assessments with affordability concerns. Key changes being considered include:
- Rate Caps for Primary Residences: Measures to limit the annual increase in property tax rates for primary residences, protecting long-term homeowners from sudden tax hikes.
- Expanded Homestead Exemptions: Enhanced tax relief for qualifying homeowners, particularly seniors and low-income residents, to offset rising assessments.
- Commercial and Rental Property Adjustments: Slightly higher tax rates on commercial and non-owner-occupied properties to distribute the tax burden more equitably.
Impact on Homeowners and Investors
For homeowners, higher assessments could mean increased tax bills, particularly in high-demand areas. However, these increases are often accompanied by rising property values, enhancing equity and potential returns on investment. Investors in rental properties may see adjusted tax rates, prompting strategic planning around rental pricing and property management.
How to Prepare
- Review Assessment Notices Carefully: Homeowners should examine their annual assessment notices and verify the accuracy of the listed property value.
- Appeal Assessments if Necessary: If homeowners believe their assessment is inaccurate, they can file an appeal with the Ann Arbor Board of Review.
- Utilize Available Exemptions: Investigating and applying for homestead exemptions and tax relief programs can help mitigate increases.
As property values in Ann Arbor rise, staying informed about tax changes and assessments is essential for managing long-term housing costs. Homeowners and investors who proactively understand and engage with the assessment process can better navigate the evolving tax landscape and protect their financial interests in 2025 and beyond.