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Proposal A and Your
Property Taxes
On March
15, 1994 the voters in Michigan approved a constitutional
amendment known as Proposal A. This amendment changed how
property taxes will be levied. Assessed Value? State
Equalized Value? Capped Value? Taxable Value? What are
these values and how do they affect me?
1. ASSESSED
VALUE
(AV): 50% of the usual selling price (market value) or the
true cash value of your property.
2. STATE
EQUALIZED VALUE
(SEV): the assessed value as finalized by the County and
State Equalization Process. In most municipalities the SEV
and AV will be the same. If there was an Ownership
Transfer on your property last year, your taxable value for
the current year will be the same as your SEV.
3. CAPPED
VALUE:
last years taxable value minus any losses (ie: demolition of
house or garage), increased by the consumer price index
(CPI) or 5% whichever is least, plus any additions (ie: new
construction or improvements).
4. TAXABLE
VALUE
(TV): simply the lesser of State Equalized Value or Capped
Value. Taxable Value is what your taxes will be based
on!
Example 1
Last year a home in Brighton had a true cash value of
$150,000. The State Equalized Value was $75,000 and the
taxable value was $64,000. Sales of comparable homes in the
neighborhood reflect a 5% decrease. The consumer price index
(CPI) for 2010 is .997%.
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2010 AV |
$71,250 |
|
2010 SEV (tentative) |
$71,250 |
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2010 Capped Value |
$63,800 ($64,000 x .997), rounded |
|
2010 Taxable Value |
$63,800 |
Example 2
Last year a home in Brighton had a true cash value of
$150,000. The State Equalized Value was $75,000 and the
taxable value was $64,000. The homeowner added a family room
valued at $20,000. The current true cash value of the home
is $155,000. The consumer price index (CPI) for 2010 is
.997%.
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2010 AV |
$77,500 |
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2010 SEV (tentative) |
$77,500 |
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2010 Capped Value |
$73,800 ($64,000 x .997) plus $10,000 (50% addition) |
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2010 Taxable Value |
$73,800 |
Example 3
Last year a home in Brighton had a true cash value of
$150,000. The State Equalized Value was $75,000 and the
taxable value was $64,000. Last year there was a sale or
transfer of ownership on the property. Sales of
comparable homes in the neighborhood reflect a 5% decrease.
The consumer price index (CPI) for 2010 is .997%.
|
2010 AV |
$71,250 |
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2010 SEV (tentative) |
$71,250 |
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2010 Taxable Value |
$71,250 |
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