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is Taxable Value Calculated?
Taxable value - the value for which your tax bill is calculated, is determined
each year by comparing the sev/assessed and capped values of your property
- then choosing the lower of the two. The assessed value is the assessor’s
estimate of 50% of the market value of the property.
value is determined using the following formula:
year taxable value – losses) x [CPI or 5% (which ever is lower)]
in most cases, are equal to the taxable value of any buildings, or portions
thereof, that were removed or destroyed in the previous year.
in most cases, are equal to the assessed value of any new buildings, or
portions thereof, that were built in the previous year.
Price Index (i.e., CPI, or the inflation rate) is equal to that
which was experienced in the state of Michigan in the prior year. This
figure is determined by the Michigan Department of Treasury.
and example from 2004:
Value for a parcel of property is the lower of either
(a) the 2004 SEV for the parcel, or (b) the 2004 capped value for the
parcel - calculated as follows: (2003 taxable value - losses) x (the lower
of 1.05 or the inflation rate multiplier of 1.023) + additions.
calculates the taxable value for a 2003 property with no physical changes
(meaning that the property’s land size remained the same and neither
the buildings nor the property were destroyed or improved in whole or
example property also experienced a 2% market value increase in 2004
and there was no "transfer of ownership" in 2003.
SEV = 50,000
- 2003 Taxable Value = 49,000
SEV = 50,000 + 2% = 51,000
2004 taxable value is the lower of:
2004 SEV of 51,000
2004 capped value, calculated as follows:
taxable value - losses) X (the lowest of 1.05 or the inflation rate
multiplier of 1.023) + additions
there are no additions or losses for this example, the capped value
- 0) X 1.023 + 0 for additions
can be further simplified as:
capped value = $50,127
2004 taxable value is $50,127 (since this is lower than the 2004 SEV