The term Taxable Value was used in the 1994 constitutional amendment known as Proposal A to replace SEV in the property tax equation to calculate property tax bills. The first step in the process of determining Taxable Value is to calculate the Capped Value of every parcel of assessable property using the following formula:
Capped Value Formula:
Prior Taxable Value - Taxable Value of Losses x Lesser of 5% or CPI multiplier + Taxable Value of Additions = Capped Value
CPI is the Consumer’s Price Index (Inflation Rate) as calculated by the State of Michigan each fall.
The legislature has defined Taxable Value to be the lesser of SEV or Capped Value. Assessors are required to annually calculate a Capped Value for each individual parcel of real property. The Capped Value is then compared to the SEV of that property, and the lower of the two will be its Taxable Value upon which taxes are levied. The year following an eligible transfer of ownership, the SEV of the transferred property set in that year is its Taxable Value.
The Equalization Timetable
For 2023, the State Tax Commission is allowing a 24-month appraisal study (differs from sales study) to determine the property assessments for all other classes of property (agricultural, commercial, industrial, etc.)
The State Tax Commission has allowed the use of foreclosure sales in the preparation of the assessment rolls. However, these sales must meet a set of standards and requirements established by the STC. The holder of the mortgage, which is usually the seller of the real estate, must provide a Real Property Statement to the local Assessor. These forms are rarely, if ever, submitted and therefore do not appear in the Township sales studies. In addition to the returning of the forms, other conditions must also be met. One of the most important conditions, and most obvious, is that the home must not show any signs of vandalism or excessive deferred maintenance. It should be in approximately the same condition as the surrounding properties. As a result of the STC requirements, very few foreclosure sales are included in the preparation of the Delhi Charter Township assessment rolls.