Michigan property taxes to high?

Fighting Your Michigan Taxes

Fighting your Michigan Property tax assessment

So you think you are paying too much in property tax. How do you know that you are? First of all, do you understand the difference between your state equalized value (SEV) and your Taxable Value?Remember you are not appealing the taxes, you are appealing the assessment, the SEV. By appealing the SEV you reset the SEV and the taxable value. It should be in your best interest for years to come.

Difference between SEV and Taxable Value
Your SEV is determined or set when there is a change in ownership of the property. I.E. when you buy the property the SEV is "reset" by the assessor to the current SEV. The state equalized value (SEV) is 1/2 the cash value of the property. (Or market value). The assessor usually determines what the SEV is by using comparables that have sold over a 2 year period. Just because you bought the house at $200,000 doesn't mean that the SEV will automatically be $100,000. The SEV value of the house may be above or below the purchase price. In the buyers market of 2007 & 2008 I am seeing many SEV's higher. That home with a $200,000 purchase price may have a SEV of $260,000.

After you buy your home then taxable value will become more important. There are two numbers on your tax bill. SEV and the second is taxable value. Proposal A of 1994 changed the way taxes were determined. Instead of increasing taxes based on 50% of actual cash value, commonly referred as SEV (state equalized value) now after the first year you buy a home property taxes are based on taxable value. If a property is not acquired during that tax year then the increases in taxable value are limited to the lesser of five percent or inflation. So boiling that down in English the first year you buy a home the taxes are based on SEV. The second year the taxable value is SEV plus the lesser of five percent or inflation. Remember inflation on the house can be negative so sometimes taxable value and SEV can go down.
The first year you are taxed on the SEV value and then from then on you are taxed on the taxable value.

The idea of Proposal A was to limit the huge increases in property value so people would not be forced out of their home because it was worth so much. Proposal A would average out the increases in your property tax.
So after the first year the number you need to pay attention to is taxable value. That is how your taxes are determined. The taxable value times your cities millage rate will equal the amount of tax you owe. In a rising real estate market your SEV will be much larger than your taxable value. The reason for that is that taxable value can only increase the lesser of 5% or inflation where SEV is similar to the market value. In most cases if a person has lived in a home for many years the SEV will be much larger than the taxable value.
*Millage rate explanation
*More on Millage rate explanation
*Oakland County Millage rates
*Wayne County Millage Rates
*Livingston County Millage rates
*Michigan Millage Rates
So in order to reduce your taxes you must be able to reduce your State Equalized Value (SEV) below your taxable value or it is not worth fighting for.Fighting your taxes will take time, and maybe a little money. You have to remember the tax system and the municipalities want to keep the taxes as high as possible to keep their revenue up. So sometimes you will not win the tax fight. Sometimes the boards of review are a rubber stamp to say "NO" forcing you to take it to the next higher level. The system is set up to protect the assessment and the burden of proof is upon you. You must get the facts to change your taxes.

For the steps on How to fight your Michigan Property taxes, How to lower your Michigan Property tax assessment feel free to go to my website www.russravary.com and visit my millage rate explanation or fighting Michigan taxes.

Michigan millage rates

People are generally confused when they get their tax statements or trying to figure out millage rates. I even have to explain it to real estate agents in the office.

Millage rates are different for each city and even different within that city because of different school systems inside that city. For example Dearborn Heights has six different school systems inside the city. So according to what city you live in, where you live within that city, and what school system your kids will go to will determine your millage rate. Canton has one school system and one millage rate, Brighton Township has 3, Livonia has 2.

There is a winter millage rate and a summer millage rate. They usually call winter taxes city taxes and summer taxes county taxes. There are different assessments on your property that add up to your winter and summer rate. For example a portion goes to the county (for the different county projects and maintenance of county buildings and roads). A portion goes to the school system, some may go to the library, some may go to roads, some may go to different projects the city is funding, etc, etc…. Remember when you voted last time and you voted for or against a tax increase for the schools. Well that would have increased the millage rate. To impose a higher rate some of them are voted on, some do not have to be voted on.

There are 2 numbers you need to know when figuring out your taxes. One is SEV, which means state equalized value. The state estimates what your house is worth. SEV is normally determined by your city or township assessor. It is 50% of what they believe the house is worth. For example if the assessor thought your house is worth $250,000 then your SEV will be 125,000 ( I will get into how to fight a bad SEV)

The second is taxable value. Proposal A of 1994 changed the way taxes were determined. Instead of increasing taxes based on 50% of actual cash value, commonly referred as SEV (state equalized value) now after the first year you buy a property taxes are based on taxable value. If a property is not acquired during that tax year then the increases in taxable value are limited to the lesser of five percent or inflation. So boiling that down in English the first year you buy a home the taxes are based on SEV. The second year the taxable value is SEV plus the lesser of five percent or inflation. The first year you are taxed on the SEV value and then from then one you are taxed on the taxable value. More on Millage rates next time. To see what your Wayne county millage rates, Oakland county millage rates, Livingston county millage rates is go www.russravary.com

I will continue on about millage rates and determing them in my next blog.

If you just want to search Wayne county homes, or search Livingston county home, or search Oakland county homes then it is easy and free on my site with no log ins or information requested from you. Surf for homes when ever and where ever you want.
May lady luck be with you today!
Russ Ravary