Michigan assessors are still required to assess taxable properties at 50% of market value. Market value is the price most people would pay for the property in its current condition on December 31. For example, a house with a market value of $100,000 would have an assessed value of $50,000.
The best indicator of the market value of a particular property is comparable sales in a homogeneous neighborhood. Each year, the assessor analyzes 2 preceding years of neighborhood sales data and estimates property values using mass appraisal methods set by the State Tax Commission. In addition, the assessor may value rental houses, apartments, and commercial properties based on their income producing potential.
The County Equalization Department and the State Tax Commission study the same sales data and the values in each county and determine if the local Assessor is assessing at 50% of market value. If not, the county or the state can increase or decrease values based on an equalization factor.
We update our value estimates each year to prevent the need for equalization factors.