February 15, 2016

Poverty Exemption Explained

The City of Detroit has a generous offering when it comes to low-income homeowners. The program is called the “Poverty Exemption” or the ” Homeowner Property Tax Assistance Program,” and it allows those who qualify to have zero annual property taxes.

Many homeowners in Detroit are low income and many of them would qualify for this program. However, because a city needs tax revenue to operate, they don’t advertise this program very widely or make it easy to apply for.

The process begins with a request for an application, made in person at the city assessor’s office. After this, the applicant will receive an application in the mail, which they are to fill out and send back. If they are approved, they will have their taxes eliminated (with some minor exemptions) for that calendar year.

If it isn’t obvious, there are some glitches in the system. For one thing, the difficulty of getting the application is an issue. The form is not distributed in person or made available online (that we can see, please prove us wrong!). The form must be filled our perfectly, and most applicants are doing this in the privacy of their home, not at the office where they can ask questions. When it is  mailed to applicant, it is sometimes backdated, so even if it is filled out perfectly, it could be rejected (fortunately this doesn’t appear to happen often). Also, the application must be filled out each year, it does not remain in place indefinitely like Homestead/Principal Residence Exemptions.

On top of all of this, it appears that some families who requested Poverty Exemption application were rejected from even receiving the form. Two members of The Tricycle Collective were told that they must return in November to request this form. If they waited that long, their summer taxes would already be overdue and the length of the application process would guarantee that they wouldn’t complete it on time for 2016. To their credit, the City Assessor’s office has taken up this issue and has issued instructions that people be given the application when requested, but it is still something we need to watch out for.

The state of Michigan is proposing legislation that would allow Poverty Exemptions to be granted retroactively. Theoretically, this could help thousands of  low income homeowners who are facing tax foreclosure to redeem their homes from foreclosure. In practice, its clear that merely having an opportunity does not mean that tit is accessible. Making  current forms of relief accessible to people is at least as important as the policies that create the relief.

If you are a low-income homeowner in Detroit who is struggling to pay their taxes or is already delinquent, please go to the 8th Floor of the City/County Building and request a Poverty Exemption Application. You can receive help filling it out from The United Community Housing Coalition (2727 2nd St.) Please report back to The Tricycle Collective with your experience. Were you turned away? Were you successful? What do you have to say about it?

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