Basic Guide To Taxable Value
Until
1994, property was valued, for tax purposes, at half its market value. This was
called its State Equalized Value, or SEV. In 1994, Michigan voters passed
Proposal A. That shifted some of the tax burden off property and onto the sales
tax, which rose from four cents on the dollar to six.
Proposal
A also limited the growth of property tax assessments. Now, we don't use SEV.
We use ``taxable value.'' It limits the growth in taxable value to 5 percent a
year or less. The gap between property value and taxable value will continue to
spread, as long as inflation drives up property values.
This
limit on taxable value assumes no significant change to the property: no new
family room, no major fire.
The
lid comes off when a parcel is sold. In the year after the sale, taxable value
kicks up to the SEV, but just for that year. Then the limit applies to future
increases, until there is another sale. A parcel's taxable value is printed on
the annual tax bill.
Tax Rates
Property
owners can calculate their tax bill by multiplying that taxable value by the
tax rate. In Michigan, the property tax rate is called a millage, and it is
figured in mills. A mill equals $1 in taxation for every $1,000 in taxable
value.
A
parcel may have several millages in its tax rate. There is likely to be a
millage to operate local government, and another for the county. Part of the
millage rate may include mills for libraries, police and fire or schools.
Millage
rates are not shown on assessment notices. Property owners can find out their
millage rates by looking at their tax bills, or calling their local assessor,
or their mortgage company. With the taxable value alone, a property owner can
tell how much a tax proposal will cost, just by multiplying the millage rate of
the proposal by taxable value. The owner of a parcel with a taxable value of
$50,000 who votes on a 2-mill issue would be voting on an additional $100 a
year in taxes.
For more information, click on the site shown below.
http://www.statetaxcentral.com/Michigan/Property_Taxes/