How Michigan property taxes work – how to read and understand your Metro Detroit property tax statement part 5

 You got your Michigan tax assessment and you have no clue how to read and understand your Metro Detroit property tax statement.  How do you know whether your tax bill has gone up or down.

There are two numbers on your Michigan property tax statement they are:

TAXABLE VALUE and SEV (STATE EQUALIZED VALUE)

SEV (STATE EQUALIZED VALUE) –is 1/2 the market value the city assessor assigns your property.  So if the the city assessor thinks your house is worth $200,000 then your SEV would be $100,000.  SEV is not the amount the city bases your taxes.  SEV is not what you can sell your Metro Detroit house for.  It is just what the city assessor thinks your house is worth.  So just by multiplying the SEV by 2 will not give you what you can sell your house for or what it will appraise for.

TAXABLE VALUE – Is the number your taxes are based on this is the number you need to look at.  Taxable value is multiplied by your cities millage rate and that determines the amount you pay.  That is what your Metro property tax statement has “taxable value”, SEV, and what you owe.

If you compared your Michigan property tax statements from a few years.  If you notice the tax table below you will see that in the years 2005 and 2006 when home values were rising the city assessors “assessed” the home’s value higher.  In 2005 the assessor thought the home was worth twice $160,980 and then he thought it was worth twice $164,200.  Then in 2007 the assessor realized home prices stabilized and then in 2008 and 2009 values started dropping.

But see the homeowners had owned the house for years.  And in Michigan the homestead act only allows the taxable value to go up “the lesser of 5% or the rate of inflation”.  So if you look at the taxable value you will notice that they kept going up even though the SEV went down.  So this Metro Detroit homeowners taxes went up even though the SEV went down.

Assessments & Total Annual Tax
Year Taxable Value State Equalized Value Homestead/ Percent Total
Taxes
2009 119,130.00 119,130.00 100.00
2008 125,580.00 135,380.00 100.00 4,244.87
2007 122,760.00 164,200.00 100.00 4,159.36
2006 118,380.00 164,200.00 100.00 4,035.02
2005 114,600.00 160,980.00 100.00 3,959.63

The bottom line is that you need to look at your taxable value to determine whether your Michigan taxes are going up or down.

I hope this help you understand your Metro Detroit property tax statement.  If you don’t understand this feel free to call me or email me with any questions.  I also do CMAs to help you fight your Michigan taxes.

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