My tax bills are calculated based on taxable value instead of state equalized value. What does taxable value mean to me?
Taxable values began in 1995 as part of Proposal A. Taxable values are adjusted each year by the Consumer Price Index (CPI) or 5% whichever is less until property title transfers. Your taxable value cannot be greater than your state equalized value. In other words, Proposal A "capped" taxable value increases by the CPI or 5%, whichever is less.
Can my taxable value increase more than the rate of inflation?
A sale and/or title transfer occurs. In the year following a sale and/or title transfer, the property becomes "uncapped" making the state equalized value (SEV) and taxable value the same. Michigan law states the actual sale price must not be the sole basis for the new SEV for that property.
New construction to a property is added to the taxable value.
The value of items omitted from the previous year(s) assessed value is added to the taxable value.
What does it mean for a property to “uncap”?
A property is said to “uncap” the year following a change in ownership. The Taxable Value then be the same as the state equalized value. This is called "uncapping the Taxable Value" and the procedure is constitutionally mandated.
If I refinance my home, will it “uncap”?
No, if the property is still under the same ownership and the mortgage was refinanced, the Taxable Value remains “capped."
Why does the assessed value change from year to year?
The assessed value must reflect 50% of market value. As market value changes, so does your assessment. For instance, if you add a garage to your home, the assessed value increases. However should your property be permanently damaged by fire, the assessed value would decrease. Property owners have a responsibility for reporting any changes made to their property that would affect its value. When you obtain a building permit, our office is notified by the Building Department.
Why do assessments go up when a property hasn’t changed?
Market value is a product of the price paid for the property. Since assessments must be set by market value, changing real estate values in the community will be reflected in the assessments. As prices increase/decrease, so does market value. All property values do not change to the same degree. Many factors influence values. Properties with water or scenic views, for example, may increase more rapidly than others.
If I am unhappy with the assessed value or taxable value, what can I do about it?
The first thing you should do is talk to your local Assessor about the valuation on your parcel. Check the appraisal records to make sure all components of the property are correct. If you wish to proceed at this point, you must make an appointment with the March Board of Review to lodge an appeal. The Board of Review is set up under the Michigan General Property Tax Law. The three member board is appointed by the Township Supervisor and approved at a public meeting by the Board of Trustees. The Board of Review will hear your appeal and will make a decision using their best judgment.
What if I am not satisfied with the Board of Review decision on my appeal?
You have the right to file an appeal with the Michigan Tax Tribunal. This appeal must be filed with the Tribunal on or before June 30, of the current year.
How was my assessed value determined?
Assessors use a state required mass appraisal method to value properties. We estimate land values from sales data and building values from a state cost manual. Then, we analyze sales data from your neighborhood and develop factors we use to further adjust our estimates to reflect local market value
My assessed value didn’t change, but my taxable value increased. Why?
The current sales information for your neighborhood may show no value increase over last year’s value. However, the taxable value is tied to the Consumer Price Index and calculated annually causing an increase in your taxable value.
I just bought a new house, why isn’t my assessed value one half of my sale price?
Michigan law prohibits assessors from basing values on one sale price. We are required to value your property based on the methods used to value other properties in your area. While we hope our value estimate is close to your sale price, it is an estimate and may not be the same as your recent sale.
Why is my change in assessed value different than my neighbor’s?
Assessed value changes vary according to the individual characteristics of houses in relation to sales in your area. Building style, size and amenities such as porches, decks, garages, and extra bathrooms affect value estimates.
What is a property transfer affidavit?
Changes in state law after Proposal A created the property transfer affidavit. An affidavit must be filed whenever title of real estate or buildings on leased land is transferred. It must be filed even if you are not recording a deed. Filing with the local assessor is mandatory.
Where do I obtain and file the transfer affidavit?
Property transfer affidavits can be obtained from closing agents such as a title office, financial institution or attorney. They can also be obtained at your local assessor’s office. The new owner must file the affidavit with the local assessor within 45 days of the transfer.
What is the purpose of the affidavit?
Assessors use the affidavit to make sure that property is assessed properly and receives the correct taxable value.
What is a "transfer of ownership?"
State law defines a "transfer of ownership" as "the conveyance of title to or present interest in property, including the beneficial use of the property." Transfers include deeds, land contracts, and a variety of transactions outlined on the back of the affidavit form.
What happens after ownership of a property is transferred?
The Michigan Constitution limits how much a property’s taxable value can increase while owned by the same person. Once the property is transferred, the assessor must change the taxable value to 50% of the property’s usual selling price. In other words, in the year following the sale the taxable value equals the current state equalized value.