Millage Rates in Michigan

Here is more on millage rates in Michigan.
The first year you are taxed on the SEV value and then from then on you are taxed on the taxable value. Taxable value can rise up to 5% or inflation which ever is less. But remember inflation on the house can be negative so sometimes taxable value and SEV can go down.

In a market where property values are rising SEV becomes less and less important to you after the first year because the taxable value should be less than the SEV. Usually when you are buying a house you will notice that if somebody has lived in the house a long time the taxable value is much lower than the SEV. That is because of Proposal A limits the increase in taxes per year. The estimated market value according to the state has risen faster than the taxable value. Proposal A saved us money!

However if values fall as they are now the assessor should lower the SEV. (they should but they don’t always do it because the city loses tax revenues). Let’s say you bought it for $300,000 in 2005, then the SEV is $150,000 in 2005. The assessor may say that the house is now worth 145,800 now so your taxes will go down in 2006. So let’s say you bought the home in 2005 at the peak of the housing market. Now two years later your house is worth less. It should reflect that in your SEV and taxable value. They both should have gone down.

The way you have to fight it is first get your facts. You need houses that have sold in the neighborhood and in the city that are comparable to yours. I.E. roughly same square footage, roughly same age, same style. They need to have sold for less than what your bought yours for and what your taxable value is. You need more than one house to support your claim. The more houses you have and the closer they are to your home the better chance you have of getting the assessor to agree with you and reduce your taxable value. Then you have to call the assessor’s office and find out the procedure to protest your taxes. Sometimes you can only do it once a year, sometimes you have to put it in writing, sometimes you have to go in front of a board.

It is worth the hassle! It will save you money for years to come when you get it corrected.
Want to figure out what your taxes are going to be? Here is the formula :

Value determined by assessor divided in half = SEV (State equalized value)

SEV X Millage rate = taxes

For example a you are buying a $400,000 house in Brighton. Let's say the SEV by coincidence corresponds to the purchase price. So the assessor estimated the house value at $400,000 too. So $400,000 X 50% = $200,000. So SEV is $200,000

$200,000 X .0361558 = $7,231.16 a year in taxes.

Two things to remember SEV can be less or more than the purchase price of the home or the offer that you are going to put in. But you are most likely going to pay based on the SEV unless you fight it with the tax board or assessor after you move in ( usually when you get your tax bill).

Remember this is only for homesteaded taxes. A homestead exemption, now known as a principal residence exemption may be used by a person who owns and occupies a home as their principal residence. If this is true, the person may claim an exemption from the 18 mills levied by local school districts for operating purposes. Again in English - Homesteaded taxes are a reduction in taxes based on that you use a home for your primary residence.

So Non-homesteaded taxes are on vacation homes, rental properties, and investment properties.

If you are not living there full time, you can not claim it. You cannot claim one house, and your wife, claim another. If you claim a homestead in another state you can not claim it here. If you try to cheat the state and they catch they can take away the homestead deduction on all your homes and make you pay back the taxes you should have been paying and penalty interest.

If you wish to search Michigan Homes or need more information on mortgages or real estate in Michigan go to my website http://www.russravary.com/
I hope this information on millage rates helped you. Russ Ravary

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