Taxable values began in 1995 as part of Proposal A. Since then taxable values have been adjusted each year by the Consumer Price Index (CPI) or 5%, whichever is less until property title transfers. Your taxable value cannot be greater than your state equalized value. In other words, Proposal A "capped" taxable value increases by the CPI or 5%, whichever is less.
Yes, under certain circumstances. Such as if a sale and/or a transfer of ownership occurs. In the year following a sale and/or transfer of ownership, the property becomes "uncapped" using the state equalized value (SEV) as a basis for the following year's taxable value. Michigan law states the actual sale price must not be the sole basis for the new SEV for that property.
Also, new construction to a property is added to the taxable value.
The Michigan Constitution still requires all properties to be assessed annually at 50% of market value. The assessed value is used in the year following a transfer of ownership to set the taxable value when a property "uncaps."
Assessors use a state required mass appraisal method to value properties. We estimate land values from sales data and building values from a state cost manual. Then we analyze sales data from your neighborhood and develop factors to further adjust our estimates to reflect local market values.
Your market value can change even when there is no physical change to your property. A growing economy or increasing population can push housing values steadily upward. The Assessor does not create increases in property value. He/she recognizes changes as they occur and must adjust values accordingly.
Assessed value changes vary according to the individual characteristics of houses in relation to sales in your area. Building style, size, and amenities such as porches, decks, garages, and extra bathrooms affect value estimates.
The current sales information for your neighborhood may show a decline in values over last year's value. However the taxable value is tied to the Consumer Price Index and calculated annually causing an increase or decrease in your taxable value.
Compare the market value of your property with sales of similar homes in your neighborhood. The sales should be on homes that are similar to yours in size, style, age, and condition.
Michigan law prohibits assessors from basing values on one sale price. We are required to value your property based on mass appraisal methods. The same methods are used to value all properties. While we hope our value estimate is close to your sale price, it is an estimate and may not be the same as your recent sale.
After gathering the facts about your assessed value, contact the Assessor at (989) 362-6241, or via email. Appeals are heard in March at the Board of Review, either by letter or in person. This step preserves your appeal rights for further action at the Michigan Tax Tribunal.
State law defines a "transfer of ownership" as "the conveyance of title to or present interest in property, including the beneficial use of the property." Transfers include deeds, land contracts, and a variety of transactions outlined on the back of the affidavit form.
The Michigan Constitution limits how much a property's taxable value can increase while owned by the same person. Once the property is transferred, the Assessor must change the taxable value to 50% of the property's usual selling price. In other words, in the year following the sale, the taxable value equals the current state equalized value.
Yes. Some of the exempt transactions include changes in ownership solely to exclude or include a spouse, transferring a property into a trust where the sole beneficiary is the creator of the trust or that person's spouse, redemption from a tax sale, or transfer to affect the foreclosure. Some of the exempt transactions are listed on the affidavit form and full descriptions are in MCL Section 211.27a(7)(a-m)
State law grants a principal residence exemption from local school operating taxes for your principal residence and qualified agricultural properties. Currently this is a reduction of 18 mills of school operating tax levy.
To qualify, by law you must own and occupy the property as your legal, primary residence by May 1st. Buyers who close and/or occupy the residence after May 1st are eligible for exemption the following year.
If this is your first principal residence affidavit or if you are buying a property that was not previously exempted, you can use the form (2368). Principal Residence Exemption forms are also available at the Assessor's Office.
You need to rescind the principal residence exemption on the house you sold and request an exemption on your new house. Use a Request to Rescind Homeowner's PRE (2602) form to rescind your old exemption and the Principal Residence Exemption Affidavit (2368) form for your new residence. The Michigan Department of Treasury recommends the forms be completed and distributed by the closing agent who supervises real estate transactions. PRE forms are also available at the Assessor's Office.
Taxes are computed by multiplying your taxable value times the total mills. A mill is $1.00 per thousand dollars of taxable value. An easy formula to calculate taxes is shown below:
Taxable Value x Mills / 1,000 = Taxes
Remember: A principal residence is exempt from 18 mills of school operating taxes. (This is only meant as an example formula, not necessarily an accurate estimate of your taxes.)
Taxes can increase because:
- The millage rate increased.
- Your taxable value increased.
- Taxable value was adjusted by the annual Consumer Price Index.
- Taxable value was uncapped after property ownership transferred.
- New construction or omitted items were added.
Property values are determined individually and differences in style, size, condition, and amenities cause differences in taxable value. If you recently purchased your property, your taxable value was uncapped. Your neighbor's taxable value may still be capped and less than yours. A lower taxable value means lower taxes.
Estimate your annual taxes by multiplying 1/2 of the estimated total value of the completed home times the tax rate. Be sure to add land value to your value estimate before computing your estimated taxes.
Michigan law requires everyone to support local public schools through property taxes. Eligible homeowners may be exempt for 18 mills of school operating taxes, but are still responsible for school debt, building funds, and state education taxes.
Typically this happens about one year after you buy a new house. Your mortgage company probably based your original tax escrow payment on the last known taxes. After you purchased the property, its taxable value was uncapped for the next tax year. The taxes were then based on a higher value. Once this happens, your mortgage company re-evaluated your escrow amounts and changed your payment to cover the actual taxes on your home. They may also increase your payment to make up any shortfalls in the previous year.
One way to avoid escrow shortages is to base your tax escrow payments on estimated taxes. Use 1/2 of your sale price (if it is a market value sale) times the tax rate to estimate your total taxes. Divide by 12 to get a monthly amount. Feel free to call the Assessing Office at (989) 362-6241 if you need assistance.
Because the Assessor has access to the City Treasurer's payment records, we can answer questions about current taxes due. Taxes due for prior years must be checked at the Iosco County Treasurer's Office at (989) 362-4409.
When trying to locate information on vacant property, it is sometimes easier to visit the Assessing Office and allow us to help you locate the property on a tax map.
If you need to find your property lines, you should contact a local surveyor to perform this service. Several are listed in the yellow pages of the phone books. We can provide your lot size and a copy of your plot map to get you started, but we cannot survey or locate stakes on your property.
Copies of recorded deeds and land contracts can be obtained from the Iosco County Register of Deeds Office in Tawas City.
Please contact the Assessing Office at (989) 362-6241 or via email