Highest Commercial Property Tax Rate in the Country?

[Robert Plumpe]

Hey all:

Here in Michigan, taxes and property are high, VERY HIGH.

I own a little bit of property and am looking for more.  HOWEVER, one of the biggest problems I'm running into is the property tax situation.  I thought taxes were bad in my suburb, but in a neighboring city, the rates are much higher yet!  The rates are so high, I think it makes investing in commercial property almost impossible.

The city in question is Harper Woods, Michigan.  For commercial properties in the Harper Woods school district (not Grosse Pointe), the tax rate is about 5.4% of the MARKET VALUE of the property.  Thus, if your property has a "true" market value of $100k, your taxes are about $5,400 per year.  This tax rate is higher than what the cap rates that some properties are trading for on the coasts!

To compound the problem further, a lot of properties are over assessed, making the tax rate even higher.  I was looking at a small, nicely maintained commercial building that had just over HALF it's rent roll going to pay the taxes...

Who really owns the property?  Arguably not the title holder, as most of the benefits (rent) of the property go to the city.

I'm completely shocked at how high this is.  The tax is really like a mortgage that can NEVER be paid off.

Does anybody know of HIGHER tax rate?