Frequently Asked Questions

I recently purchased a home. Will my taxes on this home be about the same amount as the prior owner's taxes? 

 No. Until 1994, property was valued for tax purposes at half its market value. This is called the "State Equalized Value" or SEV. That year, voters passed Proposal A, which limited the growth of property tax assessments. The formula under Proposal A keeps the taxable value of a property from growing as fast as the SEV. This gap can increase over time. However, when the property is sold, the taxable value is uncapped and jumps up to the SEV, but only for that year. There could be a substantial increase in your tax depending on the difference between the Taxable Value and the State Equalized Value of your property. 

Here is more information regarding changes in ownership and uncapping of property: 

https://www.michigan.gov/taxes/0,1607,7-238-43535_57482---,00.html

Formula Used to Calculate Property Taxes:  Taxable Value X Millage Rate

Link to State Property Tax Estimator: https://treas-secure.state.mi.us/ptestimator/ptestimator.asp

I just purchased  my property; shouldn't the assessed value automatically be half of what I paid?

By state law, a home's assessed value is not half its purchase price, but half of its market value 

 
I have not been claiming a principal residence exemption on my home. What should I do? 

Please contact us - we are here to help you. Recent tax law changes allow the assessor to correct the homestead status for the current year and 3 years back. If you are eligible for a refund for previous tax years, your refund will be issued by the County Treasurer's Office.  

Why did my taxes increase so much this year?

 Several factors affect your tax rate:

1. Taxable Value. This value is adjusted each year based on the Consumer Price Index (CPI) and other factors. An increase in taxable value will result in an increase in your taxes.

2. A millage increase. Your tax rate is based on your property's Taxable Value multiplied by the millage rate. If there is an increase in millage, there will be  an increase in property taxes.

3. You purchased a new home.  Proposal A, which was passed in 1994, places an annual cap on the growth of property tax assessments; however, when the home is sold, the cap comes off and the assessment reverts to the State Equalized Value (SEV). 

How is the assessed value calculated?

 All assessed values are calculated according the State Tax Commission standards. This value is shown as the State Equalized Value or SEV on your tax statement. It is a mass appraisal technique that takes into account the current cost to replicate your house and then depreciates that cost based on the age of the structure. It is then adjusted to market value by comparing the depreciated cost of homes that have sold in your area to their sales price. Each year, we are required by law to analyze sales by economic neighborhood using a 2-year sales study to adjust that neighborhood so that assessed values are at 50% of market value.