Assessing / Tax Info

Tim O’Donnell, Assessor

Tax roll information for property in Grosse Pointe Shores/Macomb County
http://laketwp.is.bsasoftware.com

 Tax roll information for property in Grosse Pointe Shores/Wayne County
http://grossepointetwp.is.bsasoftware.com

PROPERTY ASSESSMENT INFORMATION

WHAT IS MARKET VALUE?

The market value of property is the probable price that it would sell for. In Michigan, market value is defined as “True Cash Value”. Determining the value of a property is the Assessor’s job, and is required for every piece of property, whether small or large. Because the market values of almost all properties change from one year to the next, the Assessor must make changes accordingly. By state law, the Assessor is required to assess at 50% of true cash value all assessable property by December 31. Under the conditions of Proposal “A” adopted in March of ‘94, there must be a record of the value of the properties as if there were no cap on them. This is still called “State Equalized Value”. Taxpayers pay on what is now called the “Taxable Value”. The State Equalized Value is the basis for the taxable amount if the property is sold.

HOW PROPERTIES ARE APPRAISED

To find the value of a property, the Assessor first gathers all pertinent information in the community, i.e., real estate sales, construction costs, rental incomes, operating expenses, interest rates, etc. A comparison is made of properties similar to yours which have recently sold. Their selling prices and the circumstances of the sale/purchase must be carefully considered by the Assessor in order to arrive at a fair evaluation of your own property’s value.

ASSESSED VALUE

The assessed value must reflect 50% of market value; therefore, as market values change, so does your assessment. Should you make an addition to your home, the assessed value would be increased. If your property is permanently damaged by fire, the assessed value would, of course, decrease. Property owners are responsible for reporting any changes to their property which would affect its value. Since assessments must be set by market value, changing real estate values in the community will be reflected in the assessments. Market value is a product of the prices paid for property. As prices increase or decrease, so does market value. All properties do not change in value to the same degree -- many factors influence values. Those properties with water or scenic views, for example, may well increase more rapidly than others.

TAXABLE VALUE

In accordance with state law, the taxable value of a property for 2011 is the lesser of:

            1. 2011 taxable value minus any losses or plus any new additions, multiplied by the cost of living or 5%, whichever is less. This will give you the 2011 taxable amount.

            2. The property’s 2011 current state equalized valuation. If ownership of a property changed in 2010, the property’s taxable valuation for 2011 is the property’s 2011 state equalized valuation.

THE DETERMINATION OF YOUR TAX BILL

Your tax bill is the end calculation of multiplying your property’s taxable valuation by the local millage rates. This is a good time to schedule an appointment with City Assessor Mr. Tim O’Donnell if you have any concerns/questions about your assessment, property measurements, etc. This would alleviate unnecessary congestion during Board of Review time in March. He is normally scheduled to be in the Grosse Pointe Shores City Office on Monday afternoons. Call 881-6565 to schedule an appointment for a convenient Monday.

THE BOARD OF REVIEW AND THE ASSESSMENT APPEAL PROCESS

The Board of Review is made up of resident taxpayers, and meets in MARCH on the SECOND AND THIRD MONDAY. The Board may consider property owners’ assessment appeals by letter or in person by appointment.

The property owner or a representative of the property owner may be heard. Neither the Assessor nor the Board of Review can affect the millages or taxes. They CAN change an assessment if shown that it exceeds 50% of True Cash Value.

The property owner/taxpayer must give evidence showing that the assessment is incorrect. It is IMPERATIVE for you to be able to answer questions such as “What do you think your property is worth?” and “On what do you base your opinion?” It is further imperative that you submit the appropriate accompanying evidence. Since all assessments are to be based on the sales of similar properties, you may retain the services of a professional appraiser or, YOU research the sales in your neighborhood and compare them to your own home. This information is available at the municipal offices; however, this is YOUR appeal, and the paperwork is to be done by you. You need to be particularly careful if the sales are different from your home in size, age or quality.

In the event that your appeal is denied by the local Board of Review, keep in mind that ONLY those assessments first reviewed by the local Board of Review can be appealed to the Michigan Tax Tribunal. The Tribunal’s appeal deadline is June 30th.

Poverty-stricken property owners can request assistance from the Board of Review; however, household financial documentation will be necessary.

In deciding whether or not to appeal your assessment to the Board of Review, you should first answer the following two questions:

1. Does your protest involve an issue that the Board of Review has the authority to decide?

2. Do you have the necessary supporting evidence?

If you decide to appeal, be prepared to justify why your property would not sell for twice the assessed value

-- the Board of Review will be better able to make a fair determination if you are well prepared.

...PREPARE AN APPROPRIATE APPEAL

 ...USE VALID SUPPORTING DOCUMENTATION

 ...PRESENT FACTS ONLY

UNDERSTANDING YOUR PROPERTY TAXES

IN A DECLINING MARKET

Frequently Asked Questions

Why are my taxes increasing while the value of my property is decreasing?

Your taxes are based on the Taxable Value of your home.  Remember that the definition of Taxable Value is the lesser of SEV or last year’s Taxable Value (adjusted for physical changes) times the CPI. (1.7% for 2011).

Since the beginning of Proposal A in 1994, overall increases in SEV have generally been greater than the increase in Taxable Value capped at the CPI.  The longer a property has been owned and capped, the greater the gap between SEV and Taxable Value.  Even with a decrease in SEV for 2011, if there is still a gap between SEV and Taxable Value the Taxable Value will increase to the limit of the CPI cap.

If, however, the 2011 SEV is lower than the calculation of last year’s Taxable Value multiplied by the CPI, then the 2011 Taxable Value will be reduced to be the same as the SEV.

Why isn’t my assessment half of my purchase price?

The law defines True Cash Value as the usual selling price of a property.  The Legislature and the Courts have clearly stated that the actual selling price of a property is not the controlling factor in the True Cash Value or State Equalized Value.  For this reason, when analyzing sales for the purpose of determining assessment changes, the Assessment Office will review sales and exclude non-representative sales from the assessment analysis.  The definition of usual selling price is the assumption that the sale does not involve any element of distress from either party.  For this reason distressed sales are not considered as typical sales in the valuation of property for assessment purposes.

I recently moved into my house.  My neighbor and I have similar houses.  Why are my property taxes higher?

This is the result of the uncapping of your taxable value.  The year after a home transfers ownership the taxable value is uncapped to the SEV.  Your taxable value will now be capped until the property transfers ownership again.  This uncapping can result in different taxable values and different tax amounts for identical homes.

What is an “uncapping” of taxable value?

According to Proposal A, when a property (or interest in a property) is transferred, the following year’s SEV becomes that year’s Taxable Value.  In other words, if you purchased a property in 2010, the Taxable Value for 2011 will be the same as the 2011 SEV.  The Taxable Value will then be “capped” again in the second year following the transfer of ownership.

It is the responsibility of the buyer in a transfer to file a Property Transfer Affidavit with the Assessors Office within 45 days of the transfer.  Property Transfer Affidavit forms are available at the Grosse Pointe Township Assessors Office.

Again, it is important to note that a property does not uncap to the selling price but to the SEV in the year following the transfer of ownership.

What sales did you use to determine assessments?

The Village of Grosse Pointe Shores, a Michigan City, is using a 12 month sales study for the 2011 assessments which replaces the 24 month study that had been used in previous years.  This enables the assessing office to more accurately determine assessments in a declining market.  Because Grosse Pointe Shores is using the twelve month study the sales will not “lag” and the decline in assessed values will more accurately reflect true cash value of properties. 

For 2011 Assessments, the 12 month sales study begins October 1, 2009 and ends September 30, 2010.