The City of Detroit has made fundamental changes in its property tax system in which by the year ended 30 June 2014 it had property taxes amounting $102.1 million as a result of other funds, government agencies and component units. This made the city to create a permanent tax rate, thereby reducing all the assessed values of the properties, and limiting the city’s property growth on an annual basis. The city achieves equitable tax systems by ensuring that each property owner make their tax payments in proportion to the real market value of the property.
Adequacy
The City of Detroit has a designed property tax circuit breaker which it uses to protect is a residence from unaffordable tax bills and ensure that it allows the local administration to raise adequate revenue for the running of the city administrative operations.
Collectability
The administrative system of the City of Detroit has poorly formulated framework of ensuring effective collection of the Property taxes from all corners of the city’s economy. They experience lots of revenue pilferages due to this challenge of efficient property tax collectability standards.
Economic effects
The city realizes its revenue from property taxes on an accrual basis, which is recognized within the fiscal year in which these taxes were levied. The city of Detroit accelerates different economic projects of varied, ranging offering financial support in form debts to investors for the development of the city of undertaking capital projects of the city.
Transparency
The city of Detroit’s property tax collection process and allotment has revealed several inconsistencies which could result to drastic effects on the side of the city’s development. The inconsistencies arise from the way property tax assessment is carried and the disbursement of such revenues to the undertaking of the city’s various projects.
