Detroit couple hit with nearly $20K property tax bill after buying first home

DETROIT – A sliver of the American Dream is proving to be enormously costly for a pair of first-time home buyers.

A Detroit couple who recently bought a duplex in Midtown is confronting a staggering property tax bill that exceeds their down payment, spotlighting a growing challenge for homebuyers in the city.

Christa Hegedus and Steven Marsicano, originally from Tampa, Florida, purchased their duplex for $465,000 in November 2024. They planned to live in one unit and rent out the other.

However, their 2025 property tax bill arrived at $19,686 before exemptions. After applying the Primary Residence Exemption (PRE), which reduces taxes for owner-occupied properties, their bill dropped by $2,419, bringing it to $17,267.79.

Despite the exemption, the couple faces an annual tax burden higher than their initial down payment.

The sharp increase stems from Michigan’s “uncapping” law, which resets a property’s taxable value to its current assessed value after a sale. For this property, the taxable value jumped from $41,326 in 2024 to $261,800 in 2025.

The couple moved from Florida seeking a better quality of life. Detroit’s shops, eateries, culture, and history attracted them, but it was the people who sealed the deal, Hegedus said.

Now, their investment in the city’s upswing feels punitive.

“If we didn’t buy this place, we wouldn’t be dealing with a random $20,000 tax bill,” Hegedus said. “I worked two jobs to get the down payment and pay off debts to buy this place.”

The couple was shocked by the increase, especially since the previous owner paid about $3,500 in taxes. They also missed their summer tax bill because it was sent to their tenant’s address, leading to a surprise $1,300 increase in their mortgage payment.

Real estate broker Sami Abdallah of REMAX City Centre explained this issue is widespread.

“We see cases where first-time homebuyers can’t close on properties because of unexpectedly high tax bills,” he said. “Tax bills increasing by $10,000 to $15,000 are unsustainable for most households.”

Abdallah pointed to a double challenge: Detroit’s historically high tax rate combined with frequent over-assessments.

“The assessment formula seems to have gone rogue,” he said. “Without major reform, this will impede the city’s recovery.”

Marsicano expressed frustration with the lack of clear communication from city officials and mortgage companies.

“We don’t have $8,000 or $20,000 lying around to just catch up,” he said. “Our mortgage company didn’t bring this up. It’s not just affecting us but also the bank and the city if people have to leave and properties sit vacant again.”

The couple is now considering raising their tenant’s rent to cover the increased costs, which could displace the tenant.

Abdallah urged stakeholders, including Lansing and Detroit officials, to come together for permanent tax reform.

“No more temporary relief programs,” he said. “We need a sustainable solution to avoid losing the progress Detroit has made.”

Tips for buyers and homeowners facing high property taxes

Experts advise prospective homebuyers, real estate agents, and loan officers to ask two critical questions before closing on a property:

1. When was the last time the property was “uncapped”?
   1. Michigan’s uncapping law resets a property’s taxable value to its current market value after a sale, often causing a significant jump in taxes. Knowing the last uncapping event helps buyers anticipate how much their taxes might increase.
2. Is the property currently covered by a homestead exemption?
   1. The Primary Residence Exemption (PRE) offers a substantial tax discount for owner-occupied homes. Confirming whether this exemption applies can help buyers understand their potential tax liability. 

For homeowners already facing unexpectedly high tax bills, there are established steps to dispute or appeal assessments:

1. Informal resolution with the local assessor’s office
   1. Start by contacting the assessor’s office to discuss the assessment and seek clarification or correction.
2. File a property tax appeal with the March Board of Review
   1. If informal discussions don’t resolve the issue, homeowners can formally appeal their assessment to the local Board of Review, which meets annually in March.
3. Escalate to the Michigan Tax Tribunal
   1. If the Board of Review denies the appeal, the next step is to take the case to the Michigan Tax Tribunal, a state-level body that handles property tax disputes.

It’s important for homeowners to act promptly and meet all deadlines during this process. Keeping thorough records and documentation can strengthen an appeal. Experts urge homeowners to start with their local assessor since the rejection rate is significantly higher with the March Board of Review and Michigan Tax Tribunal.