Assessor's Office keeps your tax property recordsEvery home owner gets their new tax assessment with property records every year. This year the tax is up and the house value is down with the real estate market. Why the property value is down is easy to understand under current circumstances, but why the property tax goes up is not so obvious. The explanation provided for us in the state of Michigan (it should be similar for your state also) is: In a booming or declining market, a property' State Equalized Value will rise or fall with the market, while a property's Taxable Value will remain at a steady, gradual increase. This is because the Taxable Value is not tied to the market, but rather to the lesser of five percent (voted capped value in Michigan) or Consumer Price Index - the annual national inflation rate from October to October.
Learn tax and property records languageSome tax knowledge is required to comprehend the above statement. State Equalized Values (SEV) is equal to 50 percent of the market value of your property. When buying a property we ask the city assessor the current tax info on file to have this SEV number, the 50 percent of of the market value. For example the SEV is $85,000, than the house values is a bit more than $170,000. Call the State /City Assessor' Office in your area to learn more.
Assessor's Office is a gold mine of infoIn 1994, Michigan voters approved a constitutional amendment known as Proposal A. Proposal A was designed to limit the increase in property taxes to either 5% or the annual change in the Consumer Price Index (CPI), whichever is less, until ownership of the property is transferred. When you buy a property, the purchase price, more exact half of it becomes the new SEV. In Michigan the Taxable Value (TV) is the lower of SEV or Capped Value. The Capped Value number is calculated multiplying the previous years' Taxable Value by the CPI.
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