Court Opinion

ID: 9687177
Source: CourtListenerOpinion
Date Created: 2023-08-24 16:17:53.18436+00
Date Added: 2024-06-11T18:18:24.680080
License: Public Domain

Mackenzie, J.
(dissenting in part). In my view, the Tax Tribunal erred in using the market interest rate rather than the below market interest rate contained in petitioner’s mortgage when calculating the overall capitalization rate.
Prior to the Supreme Court’s decision in Washtenaw Co v State Tax Comm, 422 Mich 346; 373 NW2d 697 (1985), the amount paid for financing could be used in determining the cash value of real property for the purpose of assessing taxes. Had Washtenaw Co applied to this case, then I would agree that the Tax Tribunal adopted a correct principle in attempting to extract the value of favorable financing terms in determining the subject property’s true cash value. Washtenaw Co, however, was accorded only prospective application, applying to all assessments conducted after January 1, 1986, and all equalizations based on those assessments. Hence it has no application to the tax years in dispute here.
I would therefore hold that for the tax years in dispute in this case, the Tax Tribunal committed an error of law in failing to use the actual mortgage rate contained in the subject project’s mortgage note.