Value Definitions

State Equalized Value (SEV)

The State Equalized Value is the Assessed Value after adjustment following the County and State Equalization process. Often the Assessed Value and the State Equalized Value are the same. The County Board of Commissioners and the State Tax Commission must review local assessments and adjust or "Equalize" assessments by property class if the assessments are above or below the constitutional 50% level of assessment.

Taxable Value

Taxable Value is the lessor of the State Equalized Value or the Capped Value unless the property experienced a transfer of ownership in the prior year. The Capped value limitation does not apply if you had purchased your property in a prior year. Under Proposal A, which is a constitutional state law, taxes are calculated on taxable value. Taxable value by law is required to be increased or decreased by the CPI (Consumer Price Index) or 5% whichever is lower. The CPI is calculated by the State of Michigan and is set in statute. Local units cannot develop or adopt or use an inflation rate multiplier other than the one calculated by the State.

Capped Value

Capped Value is calculated by multiplying the prior years Taxable Value, with adjustments for additions and losses, by the CPI as calculated by the State of Michigan and cannot increase by more than 5%. Generally speaking, this means that unless the current year SEV is less than the previous year Taxable Value multiplied by the CPI, the current years Taxable Value will increase or decrease by the CPI.

Actual Sale Price is Not True Cash Value

The law defines True Cash Value as the usual selling price of a property. The Legislature and the Courts have clearly stated that the actual selling price of a property is not a controlling factor in True Cash Value or Assessed Value as calculated by the Assessor. For this reason, when analyzing sales for the purpose of determining assessment changes, the Assessing Office will review all sales but exclude non-representative sales from the assessment analysis.

Transfers of Ownership & Uncapping of Taxable Value

On March 15, 1994, Michigan voters approved the constitutional amendment known as Proposal A. Proposal A was designed to limit the growth in property taxes by the Consumer Price Index (CPI) until ownership (or interest in a property) was transferred.

When a transfer occurs the following years SEV becomes that years Taxable Value. In other words if you purchased a property in 2009, the taxable value for 2010 will be the same as the 2010 SEV. The Taxable Value will then be "capped" again in the second year following the transfer of property. Again, it is important to note that a property does not uncap to the selling price but to the SEV in the year following the transfer of ownership. A Property Transfer Affidavit is required to be filed within 45 days by the new owner whenever property is transferred. See the form for instructions.