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.
The assessed value is 50% of the true cash value of the market determined by the assessor using the verified sales that have occurred over sales study period time within the local jurisdiction.
In accordance with state law, the taxable value of a property is the lesser of the assessed value or cap value formula.
CAP VALUE FORMULA
Previous years taxable value - losses x rate of inflation + additions
Whichever is the lower number calculated between the assessed value and cap value formula becomes the taxable value of the property.
However, if there is a transfer of ownership that has occurred on the property in the previous year, by law, the property has to be uncapped.
Therefore, the new year's assessed value becomes the taxable value.
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 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 Tuesday mornings. Call 881-6565 to schedule an appointment.
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:
- Does your protest involve an issue that the Board of Review has the authority to decide?
- 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