Property tax rules ease deed-fraud corrections

Summary#

HB 6434 would amend Michigan’s General Property Tax Act. It would change how certain property-tax increases are handled when an owner reports deed fraud and seeks to correct the property’s title (legal ownership record). Its stated goal is to protect property owners from a property-tax increase caused by deed fraud while they pursue that correction. The bill is introduced and would not take effect unless HB 6433 or the named Senate bill is enacted.

  • A qualifying deed-fraud conveyance would not count as a “transfer of ownership” for the rule that can uncap taxable value (reset it to the property’s state equalized value).
  • To claim this treatment, an owner must file a Treasury-prescribed affidavit with the local assessing office within 30 days after learning of the fraud. The affidavit must include a sworn statement and available supporting documents.
  • For one type of affidavit, the owner must also have filed—or say they intend to file within 30 days—an affidavit with the county register of deeds under another state law. That type of affidavit is limited to three subsequent tax years for the same purported transfer.
  • If the assessor learns through the affidavit that no ownership transfer occurred, the assessor must immediately correct taxable value and official records. Corrected tax bills must be issued for years in which taxable value is corrected.
  • If a court’s final order finds that the reported transfer was not deed fraud, taxable value must be uncapped as of December 31 of the transfer year, and a corrected bill must be issued.

What it means for you#

  • Property owners reporting deed fraud: The bill offers a way to seek correction of the property-tax record while pursuing a title correction. It does not itself decide who legally owns the property or cancel a deed.
  • Owners filing an affidavit: They must meet the filing deadlines and affidavit requirements. “Deed fraud” would include later title documents derived from an unauthorized deed, even if someone involved acted in good faith.
  • Assessors and tax offices: Assessors would have to make the specified immediate correction and correct official records. The local tax collecting unit, or the county treasurer if it holds the tax roll, would have to issue corrected bills.
  • Taxpayers and local taxing units: A correction could reduce the taxable value used for property taxes. If a court later finds no deed fraud, taxable value must be uncapped and a corrected bill issued.
  • The bill does not create a new general property-tax benefit or change the tax rate.

Money#

No cost estimate or fiscal analysis is included in the supplied material.

  • Assessors and tax offices would have new correction and record-keeping duties, but the bill gives no staffing or cost estimate.
  • Corrected bills could change property-tax amounts collected or rebated. The material does not estimate the effect on property owners or local taxing units.

What is unclear#

  • HB 6434 would not take effect unless HB 6433 or the named Senate bill is enacted, but the supplied material does not include either companion bill’s text.
  • The supplied material does not include the current full Act, so the bill’s changes could not be checked against all current-law provisions.
  • The bill does not explain how the referenced title-correction process works, or what happens if the owner says they intend to file but does not file within 30 days.
  • It does not set out how tax offices should handle a claim while a court case is pending, or what happens if there is no final court order.
  • The bill gives no start date for the Act as a whole; its deed-fraud provision says it begins December 31, 2027.

Case for#

  • A possible argument for the bill is that a fraudulent title document should not trigger a property-tax increase for the true owner while they try to correct the title.
  • Requiring a sworn affidavit, supporting documents, and a separate title-related filing provides steps an owner must take before seeking this tax treatment.
  • Requiring assessors to correct records promptly could prevent a tax increase from continuing while the title issue is addressed.
  • The bill provides for taxable value to be uncapped if a final court order finds the reported transfer was not fraudulent.

Case against#

  • One concern is that an assessor must correct taxable value based on the affidavit process before the bill requires a final court decision on whether fraud occurred.
  • The bill sets a 30-day filing deadline after the owner becomes aware of the fraud. It does not explain how missed deadlines would affect an owner’s claim.
  • The bill requires corrections and corrected bills but gives no estimate of the workload or costs for assessors and tax offices.
  • The process depends on a separate title-correction law and a companion bill, so the supplied text alone does not show how the full process would work.