How the Assessor Goes About Her Job
To find the value of any piece of property, the appraiser must first know what properties similar to it are selling for, what it would cost today to replace it, how much is takes to operate and keep it in repair, what rent it may earn, and many other dollar facts affecting its value, such as the current rate of interest charged for borrowing the money or to buy or build properties like yours.
Utilizing these facts, she can then go about finding the property's value in three different ways. The first way is by comparing your property to others that have sold recently. These prices, however, must be analyzed very carefully to get the true picture. One property may have sold for more than it was really worth because the buyer was in a hurry and would pay any price. Another may have sold for less money that it was actually worth because the owner needed cash right away. He was willing to sell to the first buyer who made him an offer. Using this approach - comparing the selling prices of properties similar to yours - the appraiser must always consider such overpricing or under pricing to arrive at a fair valuation of your property.
A second way to value your property is based on how much money it would take, at current material and labor costs, to replace your property with one similar. If your property is not new, she must also determine how much it has depreciated.
The third way is to evaluate how much income your property would produce if it were rented like an apartment house, store or factory. The appraiser must consider operating expenses, taxes, insurance, maintenance costs, and the return most people would expect on your kind of property.
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Determining Market Value
Finding the market value of your property involves discovering the price most people would pay for it in its present condition. It's not quite that simple, however, because the assessor has to find what this value would be for every piece of property, no matter how big or how small. But it doesn't stop there. Each year she has to do the whole thing over again, because the market value of almost everything changes from one year to the next - as we all know. This is done so that those of us who want the advantages of having schools, fire and police protection, and other public benefits (which means just about all of us), can absorb our fair share of the cost, in proportion to the amount of money our individual property is worth.
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Why Assessed Values May Change From Year to Year
When market value changes, naturally so does assessed value. For instance, if you were to add a garage to your home, the assessed value would increase. However, should your property be damaged by a fire, the assessed value would be decreased. The appraiser has not created the value; she simply has the legal responsibility to discover it as it exists and appraise your property accordingly, since people make value by their transactions in the market place.
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Assessed Value and the Tax Rate
The appraiser has nothing to do with the total amount of taxes collected. Her primary responsibility is to find the fair market value of your property, so that you may pay only your fair share of the taxes. To afford all the services you enjoy, taxing agencies must levy taxes. The sum of the monies needed each year, by all the taxing agencies, determines what is called the tax rate. This tax rate is applied to your property's assessed value.
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See Us First
If your opinion of the value of your property differs from the appraiser's, by all means come in and discuss the matter with us. We will be glad to discuss any questions you may have about the appraisal.
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What is a Homestead/Principal Residence Exemption?
If you own and occupy your homestead, it may be exempt from a portion of your local school operating taxes. To claim an exemption, you must complete a Principal Residence Exemption Affidavit and file it with your township or city by May 1. If your property doesn't have a Homestead Exemption status at the time of purchase (purchases after 1994), and it's past May 1, then the exemption doesn't become effective until the next year.
Qualified Agricultural Property is exempt from the local school operating tax.
Owning means you hold the legal title to the homestead or that you are currently buying it on a notarized or recorded land contract. Renters should not file this form.
Occupying means this is your principal residence or "homestead"; the place you intend to return to whenever you go away. It is the address that appears on your Driver License or Voter Registration Card. You may have only one homestead at a time. Vacation homes and income property, which you do not occupy as your principal residence, may not be claimed.
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Rescinding Your Exemption
If you claim an exemption and then stop using that address as a principal residence, you must notify your township or city assessor within 90 days of the change or you may be penalized. This can be done using the Rescind Homestead Exemption (Form 2602, formerly T-1067).
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What are Taxable, Assessed and State Equalized Value?
Proposal A, passed by the voters on March 15, 1994, places a limit on the value to compute property taxes (Consumer Price Index - Rate of Inflation up to 5%). Any physical changes in your property may also increase or decrease your Taxable Value. Starting in 1995, your property taxes were calculated on Taxable Value. Prior to 1995, your property taxes were calculated on State Equalized Value. State Equalized Value (SEV) is the Assessed Value multiplied by the Equalization Factor, if any. State Equalized Value must approximate 50% of market value. Your Taxable Value cannot be higher than your State Equalized Value.
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What is Uncapping?
If there was a transfer of ownership on your property, your Taxable Value for the following year is the same as your State Equalized Value. Certain types of transfers are exempt from uncapping. The Property Transfer Affidavit lists the types of exempt transfers.
A Property Transfer Affidavit form must be filed whenever real estate or some types of personal property are transferred (even if you are not recording a deed). It is used by the assessor to ensure the property is assessed properly and receives the correct taxable value. It must be filed by the new owner with the assessor for the city or township where the property is located within 45 days of the transfer. If it is not filed timely, a penalty of $5/day (maximum $200) applies.
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What Will My Taxes Be?
In an effort to make it easy to understand, this is a limited example in regards to how property tax bills are calculated in the City of Grand Blanc. Basically there are two types of property taxes levied in Michigan: Homestead and Non-Homestead. The difference is that Homestead properties are exempt from paying some of the school millage.
Taxable Value / 1,000 x Number of Mills + 1% = Taxes
The Taxable Value, divided by 1,000, times the millage rate, plus 1% administration fee, equals the taxes due. One mill = $1.00 per thousand dollars of value.
||Homestead Millage Rate
||Non-Homestead Millage Rate
Assume the Taxable Value of your Homestead/Principal Residence property is $100,000 and the 2012 total millage rate is 41.8231 mills. Your tax bill would be calculated as follows:
Millage rate is per $1,000 of Taxable Value
Taxable Value/1,000 x millage rate + 1% administration fee = taxes
| $100,000/1,000 =
|$100 x 41.8231 =
|Plus 1% +
|Total Taxes =
Please remember that the Assessor does not compute or collect property taxes. This example provides a brief overview of the process and for a more detailed explanation, you should contact the City Treasurer.
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How Can I Protest My Assessed and Taxable Value?
Every year you will receive an Assessment Change notice at least 10 days prior to the first March Board of Review meeting. Information about dates and times for March Board of Review appointments will be printed on this notice.
The March Board of Review has the authority to review the following types of appeals: current year assessed value; current year tentative taxable value; current year poverty exemptions under MCL 211.7u; current year Assessor denial of the continuation of a Qualified Agricultural Property Exemption; and the current year assessment classification. The Board shall review the roll according to facts existing on tax day, preceding December 31st.
Every person who makes a request, protest or application to the Board of Review for the correction of the assessed value or the tentative taxable value of the person's property shall be notified in writing of the Board of Review's action, not later than the first Monday in June.
An appeal must be made to the local Board of Review in order to preserve the right to a further appeal to the Michigan Tax Tribunal. A further appeal of the Board of Review actions (except for property classification) may be made to the Michigan Tax Tribunal, P.O. Box 30232, Lansing, MI 48909, in writing by June 30th of the current year. A Board of Review action involving a classification appeal may be appealed to the State Tax Commission if made by June 30th of the current year.
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General Requirements for Board of Review
All meetings are open to the public, pursuant to Act No. 266 of the Public Acts of 1976. A resident taxpayer must appear in person or be represented by an authorized representative. Attorneys, accountants, agents or representatives may appear on behalf of a property owner, however, a written authorization from the owner is required. A non-resident taxpayer may file a protest in writing and shall not be required to make a personal appearance. All written protests must be received by the Board of Review prior to the close of the Board.
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