I’ve been wanting to write something up on the rhythm of the delinquent property tax system, how delinquent tax numbers in Detroit change over the course of the year, and how they look this year vs. the last couple years. To do so, however, I need the 2021 delinquent transfer to be confirmed and that hasn’t happened yet.
What does that mean?
On March 1st every year, cities in Michigan transfer their uncollected property taxes from the prior year to their county treasurer — the “delinquent transfer.”
These are the balances owed for any property that did not see its taxes paid in full for the prior year. Ultimately, it will be the county treasurer’s job, within Michigan’s delinquent tax system, to collect those property taxes.
But first, the delinquent property tax balances need to be confirmed. I am not sure what every permutation of “confirmation” involves but, for example, I know that sometimes homes in Detroit that are granted HOPE property tax exemptions (for homeowners with low incomes) in the December Board of Review still have their taxes transfer to the county as delinquent because of lags in the systems that govern these processes.
Those taxes shouldn’t be delinquent: the property is exempt — the taxes should be zeroed out. The confirmation process gives the treasurer’s office a chance to clean up any of those issues and make sure the properties that owe delinquent property taxes actually owe those taxes and in the right amounts.
For instance, here’s the delinquent tax page from the Wayne County Treasurer’s website for a home in Detroit that I know was granted a HOPE exemption in 2021, yet the property’s 2021 taxes are showing up as “UNCONFIRMED” (address removed for privacy):
As you can see, there’s a note at the bottom of the window explaining that 2021 data hasn’t been confirmed.
Once the data is confirmed, that 2021 balance will be wiped out and the remaining delinquent taxes will be automatically paid off by the Detroit Tax Relief Fund at a cost of about $1,100 — around an 80% reduction from the face value of the debt.
That’s because this home, as a result of receiving a HOPE property tax exemption, will also automatically be enrolled in Pay As You Stay which reduces the tax debt to the lesser of 10% of the taxable value of the home, or the base amount of tax debt (minus interest, penalties, and fees). In this case, 10% of the taxable value is around $1,100, so that will be the cost to wipe out the debt.
But that’s a digression — back to the delinquent transfer and confirmation process.
Within the delinquent transfer, prior to confirmation, there are thousands and thousands of properties with minuscule balances. In Detroit in April of 2021, for instance, there were 21,000 properties that were included in the delinquent transfer with a balance less than $50. There were 10,000 properties with a delinquent balance less than $5. However, by June of 2021, once balances were confirmed, there were just 42 Detroit properties that owed less than $5.
Typically, delinquent balances are confirmed sometime in May. It seems to be taking longer the last couple years, but I’m not sure. Maybe I’m just impatient.
Once the delinquent transfer is confirmed, I’ll be back with more on how things look in Detroit this year vs. the last couple years.
I love what a delinquent tax nerd you are!!