Property assessment is the process of determining the value of real and personal property in the State of Michigan in order to levy the property taxes that fund local government, including municipalities, counties, community colleges and schools. The assessments are done on a "mass appraisal" basis, which means that the book value of a property that is established by using the State of Michigan's Assessors Manuals is adjusted to the local real estate market. Following are some important terms to help property owners understand the assessing process:
Assessment notices are sent to all property owners in February of each year, informing them of what the assessor has established as the state equalized and taxable values for the upcoming tax year. Assessments may only be appealed to the March Board of Review.
Board of Review
The Board of Review consists of three members who are residents of the City, as outlined by the City Charter. They meet three times per year to hear appeals and/or to correct a property tax record. Decisions of the Board of Review may be appealed to the Michigan Tax Tribunal.
Fieldwork is the inspection of property in order to ensure that the property's records are as up-to-date as possible. Fieldwork includes measuring structures, taking photographs, and interviewing property owners when applicable. The assessor will send a postcard to the owner of the property prior to visiting, and personnel performing fieldwork will carry photo identification.
Property Transfers and "Uncapping"
Property transfers occur when there is a change in ownership for the property. This includes when a property is sold, but also when owners are added or removed from the property. or when property is transferred into a trust. Any time a property is transferred, the owner should file a Property Transfer Affidavit with the City Assessor. Some transfers, such as the sale of a property, trigger an "uncapping" where the Taxable Value increases to equal the State Equalized Value.
State Equalized Value vs Taxable Value
The State Equalized Value is the market value of the property, based on the mass appraisal process. Your tax bill is not dependent on the State Equalized Value, unless the property transferred in the previous calendar year. The Taxable Value is what determines the tax bill. It can only increase by the rate of inflation, or 5%, whichever is lower, and it resets to equal the State Equalized Value in the year after a property has transferred.