Property Assessment Methodology
In March of 1994 the Voters in Michigan approved a Constitutional Amendment known as Proposal A which drastically changed the property assessment and taxation system. Prior to Proposal A, taxes were calculated on Assessed Value while post Proposal A, taxes are calculated on Taxable Value.
Now what are these values and what do they mean…
- Assessed Value (AV): 50% of the usual selling price (market value) or true cash value of your property
- State Equalized Value (SEV): the assessed value as finalized by the County and State Equalization Process. In most cases, the SEV and AV will be the same
- Capped Value: last years taxable value minus any losses (i.e.: demolition), increased by the consumer price index (CPI) or 5%, whichever is least, plus any additions (i.e.: new construction)
- Taxable Value (TV): simply the lesser of the State Equalized Value and the Capped Value