On August 19 Jill and Dave Brown, Michigan Advanced Assessing Officers, made a presentation to the club on Michigan Taxation and how Property Valuation works in the state of Michigan. Jill and Dave serve as Assessing Officers for several counties in northwest Michigan. Jill walked the club through examples of how property taxes are determined/calculated and explained terminology used in the home/property assessment and what that means to one's property tax. Key terminology included:
KEY VALUE TERMINOLOGY
- Assessed Value (AV) - 50% of the estimated True Cash Value (Market Value)
- State Equalized Value (SEV) = AV. Note: The General Property Tax Act requires properties to be re-assessed/re-valued annually and set to an estimated 50% of current market values.
Taxable Value (TV)
- Calculation used to formulate tax bills.
- "Capped" Taxable Value = (Prior Year Taxable Value - losses) x Interest Rate Multiplier + Additions
- "Uncapped" Taxable Value = Current Year Assessed /SEV
How to Determine Taxable Values
Capped - NO prior year transfers of ownership occurred. Annual increases limited to the rate of inflation or 5% max.
Uncapped - A non-exempt transfer of ownership occurred in the immediate previous tax year. Assessed/SEV becomes the new taxable value. And value increase is subject to Market Demands.
Based on where your property falls in the above categories has a direct impact on how and what your property taxes will be. There are appeal processes you can take if you feel your property taxes seem incorrect.