So many people are confused on how Michigan property taxes work, one of the keys is to understand what SEV (state equalized value) definition is.
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 $320,000 then your SEV would be $160,000.
- SEV is not the amount the city bases your taxes.
- SEV is not what you can sell your Metro Detroit home for.
- SEV 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.
Your city or township assessor determines the State Equalized Value SEV based on a formula and other recently sold homes that are comparable. But remember when you get your tax statement thatSEV is only what the city thinks it is worth not what your taxes are based on. The Taxable Value is what you taxes are based on.
When you buy a house the taxes you see are based on the taxable value. But next year the taxable value resets to the SEV. So if the taxable value was $110,000 and the SEV was $200,000 then the taxes will be going up. If the SEV and the taxable value are the exact same number then your taxes won’t go up when you buy the house unless the city raises the State Equalized Value during the year.
The Michigan property tax assessment system is a little confusing to many people. I hope this series helps you understand it a little more.
How Michigan property taxes work- homestead taxes and non-homestead taxes - part 1
How Michigan property taxes work – the difference between SEV and taxable value part 2
How Michigan property taxes work – will my property taxes go up after I buy a house – part 3
how Michigan property taxes work – buy a foreclosure with non-homestead taxes – part 4
How Michigan property taxes work – how to read and understand your Metro Detroit property tax statement part 5
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