2007 State of Michigan Property Assessment

Aha!  I found a decent explanation, finally, about Prop A and how it functions in a declining real estate market.  As described here, we experienced a 6% drop in our 2007 property assessment.  Now I can’t show where the appraiser got their information, but I can now show why some folks’ assessment will jump, wilst others drop.

Oakland County published this wonderfull brochure entitled “A Guide to your Property Taxes and Proposal “A”.  Open it up and give it a read when you’ve got a clear head and a little time to wrap the noggin around it. 

The short story for State of Michigan property owners:  “Taxable Value is the lesser of the State Equalized Value or Capped Value, except the year following a transfer (sale).”

On page 7 of the Oakland County Guide there is this quote:

This example illustrates a transfer of a property in 2001. The property became uncapped and then recapped in 2002. The year of recapping the State Equalized Value (SEV) becomes the new taxable value. The SEV will increase or decrease as it adjusts to market conditions. The capped value increases by the Consumer Price Index (CPI) assigned for that year. The Taxable Value is determined by using the SEV or Capped Value, whichever is the lesser, except the year following a transfer. (emphasis added)

So, there are two forces at work here on our assessments.  One is the housing market and how it affects appraisal values for your community.  The other is the Consumer Price Index (CPI).  The CPI is what the CPI is and if you purchased long enough ago that the difference between your SEV and Taxable Value will not be affected by the percentage drop in the area housing market, your assessment will jump by the CPI percentage.

If the difference between your SEV and Taxable Value will be obliterated as a result of the drop in the area housing market, then your assessment will drop, because they assess based on the lower of your SEV or Capped Value.

Clear as mud?  Right? Right.

Discuss amongst yourselves…..

10 Responses to 2007 State of Michigan Property Assessment

  1. I have heard that doubling the SEV on a home is a way to ball park what the home might reasonably list at.
    What do you think of that?


  2. Kevin,
    That might work fine in a seller’s market where prices are on the rise. However, with prices declining and the SEV rate increase a result of a nearly 3 year old market survey, it seems to me to be a recipe for an overpriced listing.

  3. Well my property assessment went up 58.5 percent, Yep it’s been increasing every year little by little in line with it’s worth, but now according to the assessor it was just so low compared to other houses in the neighborhood that are so much larger and have sold numerous times over for more than they were worth thanks to appraisers working with the buyers and the mortgge companies, so my house needed reassesed. Nobody in their right mind would pay 93,000 for my little house. Bought in 92 $27,000, assessment comes, major increase, point out should have been half what I paid for, gets corrected. 93 freeze comes in, 94 proposal a passes. I’m set. Reasonable assessments til I replace the falling down porch (repair maintenance right?) well two years later, we reviewed your area,…..another major increase (yeah right, the building permit caught your attention). Three years ago, reroofed, once again, since he doesn’t want to be obvious, this years come, call, I figure it’s a mathematical error, maybe they mean 5.5 percent, which puts it in debatable territory but not worth dealing with. He says well we noticed your SEV was noticeably low…..so we…. reassed. Now I’m looking at recent sales for houses nicer than mine, same area, slightly larger, because, hey I have the littlest house in town with one exception, they’re selling for 30 to 66,000, So how is mine worth 93. Maybe if it burns down and the insurance company builds another. I point out, I don’t have carpeting, I don’t have forced air furnace, (I have a gravity octipus and wood floors not worth refinishing) and I think you have my square footage wrong and I don’t have 3 bedrooms, where do you put em in 23×20–people have garages and additions larger than my house. Well that doesn’t really matter how many rooms you have, it’s the footage. Why quibble about 100 square feet when that’s not going to change it that much. Does it matter that due to the emerald ash borer and the drought and storms i’ve lost three huges trees, apparently not, nomatter what you yard is like this amount equals this amount on all the property cards I viewed. Why am I concerned. Well what if they decided to do special assessments. What if they decided to use SEV/AV instead of TV which didn’t exist when special assessments laws were made. What if I turn idiot and convince someone to lend me based on my SEV/AV? With assessing like this there will never be any improvements made. So let him in to do an assessment. Yep we’d go from worth 93,000 to you have one year to rectify deficiencies or we’ll condem and tear your house down. I really wish I had moved to Arizona when my family did.

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