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Proposal "A"
Property Valuation & Tax Information
Since the passage of Proposal "A" on March 15, 1994, several legislative changes have occurred affecting property values and taxes.
Prior to 1995, taxes were calculated on "state equalized value." State equalized value must approximate 50% of market value.
Taxable Value
Beginning in 1995, property taxes are calculated on "taxable value," which is subject to a "capped value." The capped value is calculated by taking the prior year's taxable value, minus any losses to the property, multiplied by the cap (which is the lesser of either the Consumer Price Index or 5%), plus any new additions to the property. This calculation is called the capped value. This capped value is then compared to the state equalized value and the taxable value becomes the lesser of the two values, unless a transfer of ownership occurred in the prior year.
If a transfer of ownership occurred in the prior year, then the capped value no longer applies and the taxable value becomes the new state equalized value.
Tax Calculation
The following is a simple demonstration of how taxes are calculated. There are 2 types of property taxes levied in the State of Michigan:
Example: Assume the taxable value of your principal residence property is $100,000 and the millage rate is 23.9353. Your tax bill would be calculated as follows:
Since the passage of Proposal "A" on March 15, 1994, several legislative changes have occurred affecting property values and taxes.
Prior to 1995, taxes were calculated on "state equalized value." State equalized value must approximate 50% of market value.
Taxable Value
Beginning in 1995, property taxes are calculated on "taxable value," which is subject to a "capped value." The capped value is calculated by taking the prior year's taxable value, minus any losses to the property, multiplied by the cap (which is the lesser of either the Consumer Price Index or 5%), plus any new additions to the property. This calculation is called the capped value. This capped value is then compared to the state equalized value and the taxable value becomes the lesser of the two values, unless a transfer of ownership occurred in the prior year.
If a transfer of ownership occurred in the prior year, then the capped value no longer applies and the taxable value becomes the new state equalized value.
Tax Calculation
The following is a simple demonstration of how taxes are calculated. There are 2 types of property taxes levied in the State of Michigan:
- Homeowner's Principal Residence (formerly know as Homestead)
- Non-Homestead
- Taxable value x millage rate = taxes
Example: Assume the taxable value of your principal residence property is $100,000 and the millage rate is 23.9353. Your tax bill would be calculated as follows:
- $100,000 x 0.0239353 = $2,393.53