The Michigan Court of Appeals recently upheld a property tax valuation dispute involving Manuel and Fay Fernandez and the City of Ann Arbor. The court's decision, issued on November 12, 2026, confirmed the city’s assessment of the true cash value (TCV) of the Fernandez residence for the 2024 tax year. This ruling affects homeowners in similar disputes regarding property tax assessments and the valuation of their homes.

The Fernandez couple had challenged the city’s valuation, arguing that their home's value had been adversely affected by the construction of a neighboring house. They contended that this construction reduced their property’s market appeal and privacy, leading them to propose a lower TCV of $900,000. However, the city assessed their home at $714,500, which was later adjusted to $615,000 by the local Board of Review (BOR). The case was brought before the Michigan Tax Tribunal after the couple sought a further reduction in their home’s assessed value.

In the background of this case, the Fernandez home was built in 2017 and features 3,853 square feet of living space. The couple purchased the property in October 2020 for $940,000. They argued that the new construction next door significantly impacted their enjoyment of their home and its overall value. The couple provided evidence, including photographs, to illustrate the changes in their views and privacy due to the neighboring house's proximity.

The Tax Tribunal initially sided with the city, determining that the Fernandez's evidence did not sufficiently demonstrate a reduction in their home's market value. The Tribunal assessed the home’s TCV at $1,315,000 based on a valuation report from the city, which analyzed comparable properties and concluded that the Fernandez home was worth significantly more than the couple proposed.

The court ruled that the Tax Tribunal's decision was supported by substantial evidence. The judges found that the city’s valuation report was timely submitted and adequately addressed the property’s characteristics. The report considered various appraisal methods, including sales-comparison, cost, and income approaches, ultimately favoring the sales-comparison method based on recent property sales in the area.

In the ruling, the court stated, “The Tribunal must make an independent determination of value...It may not automatically accept a respondent’s assessment merely because the petitioner failed to establish the exact value claimed.” This highlighted the Tribunal's responsibility to evaluate the evidence presented by both parties and to determine the most accurate property valuation.

The judges also noted that the Fernandez couple had not adequately quantified the impact of the neighboring construction on their home’s market value. The court pointed out that while the couple described their loss of views and privacy, they failed to provide a reliable market-derived adjustment to the sales or a calculation of the resulting usual selling price.

This ruling has significant implications for homeowners in Ann Arbor and potentially across Michigan. It underscores the importance of providing substantial evidence when challenging property tax assessments. Homeowners must clearly demonstrate how specific factors, such as neighboring construction, impact their property’s value to succeed in such disputes.

The court’s decision also reinforces the standards for property valuation in Michigan, emphasizing that property must be assessed at no more than 50% of its true cash value. This ruling may influence future cases where homeowners seek to contest their property tax assessments based on perceived decreases in value due to external factors.

Moving forward, the Fernandez couple has the option to appeal the court's decision, although details regarding the next steps were not specified in the court filing. This case serves as a reminder for homeowners to be diligent in understanding the factors that affect their property values and the importance of thorough documentation when contesting tax assessments.