Information About Annual Assessments
- Proposal A
- Assessed and State Equalized Values
- Property Sales
- Taxable Values
- Transfer of Ownership
- Principal Residence Exemption
- Assessment Change Notices
Proposal A (Top of Page)
Michigan’s tax structure traditionally relies on property taxes to fund schools, townships, villages, cities, counties, community colleges and libraries. In 1994 Michigan voters approved Proposal A changing the Michigan Constitution and granting the following tax changes:
- Added an extra 2% on sales and use taxes (from 4% to 6%), dedicating additional revenues to schools.
- Limited yearly increases in taxable value by the inflation rate (Consumer Price Index) or 5%. When property is sold or transferred adjust its taxable value to 50% of its market value.
- Exempted eligible homeowners from paying local school operating taxes on their homes.
Assessed & State Equalized Values (Top of Page)
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 two 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.
Property Sales (Top of Page)
Michigan law prohibits assessors from assessing properties at 50% of a sale price. Whether or not a property has sold, the assessor must value properties using sales from a state-required time period and the same mass appraisal methods used to value properties that have not sold.
Although you receive your assessment change notice in early March each year, your value estimate does not reflect "current" market value. Using a two-year study, we are required to use sales that occurred between 10/1/11 through 9/30/13 for the 2014 value estimates. You should use this same time period when comparing sales to your new property value estimate.
Foreclosures (Top of Page)
Although foreclosures have increased recently, the assessor must carefully evaluate the impact to the local real estate values. Assessors and appraisal professionals normally do not use sales from lending institutions to value property. The lending institution is motivated to sell quickly and, therefore, would typically sell at a discounted price. Other factors such as condition of the property at time of sale could be a factor if the property has been vacant for a period of time.
The increased number of foreclosures and the tightened lending standards impacts values by increasing the number of properties offered for sale, decreasing the number of people who can obtain financing, and potentially lowering sales prices. As the real estate market reacts to these foreclosures, assessors will continue to monitor the impact on local real estate values.
Taxable Values (Top of Page)
If you have owned your home for more than a year, increases in your property’s taxable value are limited by the Consumer Price Index (CPI) or 5% whichever is less.
Your taxable value can increase even if your state equalized value decreases or stays the same. As long as your taxable value is lower than your state equalized value, you will see an increase in your taxable value. The assessor must also add new construction, such as a new garage or addition, to your taxable value.
In the year immediately following a transfer of ownership, the assessor must adjust the property’s taxable value to 50% of its market value. In other words, the assessor must "uncap" the taxable value the year following a transfer of ownership.
Taxes (Top of Page)
While you can continue to compare assessed values with other similar properties in your neighborhood, you cannot compare taxable values or taxes. You cannot determine if your taxes are "fair" by comparing them with the taxes of other homes. Property taxes are based, in part, on a property’s taxable value. Your neighbor’s taxable value and taxes may be lower than yours if you recently bought your home and your neighbor has owned his/her home for a number of years.
Transfers of Ownership (Top of Page)
Michigan law defines a "transfer of ownership" as "the conveyance of title to or present interest in property, including the beneficial use of the property." Transfers of ownership include deeds, land contracts, distributions of estates, and a variety of other transactions.
Whenever a property transfer occurs, the new owner must file an affidavit with the local assessor within 45 days of the transfer. The assessor must adjust or "uncap" the property’s taxable value in the year immediately following.
Some transfers of ownership are exempt from adjusting. Transfers between husband and wife are exempt. Transfers between other family members or from an estate, however, are not exempt.
You can find Property Transfer Affidavits at the Michigan Department of Treasury website.
Principal Residence Exemption (Top of Page)
Certain homeowners may be eligible for exemption from 18 mills of the local school operating taxes. To qualify, you must own and occupy the home as a legal primary residence by June 1. You can find Principal Residence Exemption Affidavits and other related forms at the Michigan Department of Treasury website.
Assessment Change Notices (Top of Page)
Michigan law requires assessors to send notices to taxpayers whose taxable or assessed values have increased. We send notices to taxpayers whose values have increased or decreased. It is a Notice of Assessment, Taxable Value, and Property Classification. It is not a tax bill. You do not have to respond to this notice if you agree with the proposed values. However, we strongly urge you to contact us immediately upon receiving your notice if you disagree with the values or have questions. Michigan law limits the appeal time period to the second week of March each year.
Appeals (Top of Page)
We ask you to discuss your value changes with Assessing staff before making an appointment with the Board of Review. This allows us to exchange information and explain how your value was determined. Please call or come into our office to discuss your value with Assessing staff.
If you’re not satisfied with the outcome of the Assessor’s Review, or if you prefer the formal appeal process, you can appeal to the Board of Review.
We have five Battle Creek residents on our Board that are appointed by the Mayor and City Commission. They meet each year in March to review property values and hear appeals from property owners.
Please call our office to make an appointment and be prepared to present evidence supporting your opinion of value. The best evidence to provide is sales of properties in your area that are similar to yours in style, size, age and condition.