Reduce Your Michigan Property Taxes

In Michigan, each parcel of real property is annually given three valuations: assessed value, state-equalized value, and taxable value. The "assessed value" is the value placed upon the property by the local assessment officer based on what they believe 50% of the market price of the property to be as of December 31st of the prior year. After the local assessor determines the property's assessed value, the county board of commissioners and State Tax Commission apply an adjustment factor to bring the total valuation across all assessing units and counties to as close to 50 percent as possible. This equalization process results in the property's "state equalized value" or SEV. Finally, the "taxable value" is determined. The taxable value determines the property taxes that are owed for the year, and certain caps apply based on Michigan law. For property acquired in the previous year, the taxable value is its SEV. For each subsequent year, the taxable value is the lesser of (1) that year's SEV versus the previous year's taxable value minus losses, adjusted for inflation, plus new property improvements, or (2) the previous year's taxable value plus 5 percent. In other words, any increase in taxable value from one year to the next is capped at the rate of inflation or five percent, whichever is less, except for new construction.

The property tax owing for each parcel of real property is its taxable value multiplied by the tax rate. The tax rate, or millage, is the number of tax dollars the taxpayer must pay for each $1,000 of taxable value. This rate varies by local unit. For example, if the local millage rate is 38 mills ($38 per $1,000 of taxable value) and the taxable value is $250,000, the formula would be $38 x $250 = $9,500.

Property Tax Reduction Services, LLC has expertise in assisting real property owners to challenge their assessment and lower their property taxes.