|How are property taxes calculated?
Property taxes are calculated by multiplying two values- The taxable value of a property and the millage rate. Special assessment (drains) may also be added to the winter bill.
What are the State Equalized, assessed and taxable values?
State equalized, assessed and taxable values are all independently calculated from each other and may be different or the same.
State Equalized Value (SEV)- This value is typically the same as the assessed value unless the County or State has deemed that the Assessor is not assessing property at 50% of Market Value. Then a factor is applied and the SEV would differ from the assessed value.
- Assessed Value (AV)- This value is defined by State law as not greater than 50% of True Cash Value (market value) of the property being valued.
- Taxable Value (TV)- This value is calculated from a formula created by Proposal "A" in 1994. The formula is:
(Previous Year TV- losses) X CPI + Additions = Current year TV
- Losses + Physical changes to property that lower value (i.e. removal of a garage or porch)
- CPI= Inflation rate as calculated by the Michigan State Tax Commission
- Additions= Physical changes to the property that increase value (i.e. addition of a garage or porch)
By definition the taxable value can not be greater than the assessed value. However, in the year following a transfer of ownership the taxable value is uncapped and increased to the current year assessed value. See transfer of ownership link above.
What is the millage rate?
A mill represents $ 1 of tax per $ 1000 of taxable value. Several agencies levy millage. The Township collects taxes for itself along with Berrien County (general and other services), all school districts (Bridgman, Lakeshore and River Valley), RESA (general and special education), drain assessments, Lake Michigan College, and State Education tax.
Why did my assessed value go down and my taxable value go up?
As noted above, a property's assessed value and taxable value are independently calculated. Assessed values change with the real estate market and can go up or down without limitation. Taxable values change based on the above formula. Regardless of the change in assessed value, as long as the taxable value is less than the assessed value it will increase based on the above formula. That is based on State law and not unique to the Township.
Can the assessment and taxable value be changed during the year?
The valuation date for all property in Michigan is December 31st of the preceding year. In example, the 2015 assessment is based on the market conditions and what physically existed on the property as of December 31st, 2014. Property owners have the ability to protest this value to the March Board of Review. Once the March Board of Review adjourns that values are set and are the basis for both the July & December tax bills. If an appeal was made to the March Board of Review a subsequent appeal may be filed with the Michigan Tax Tribunal.
What are the Principal Residence Exemption (PRE) and Qualified Agricultural Exemption?
Both exemptions allow for Local School Operating tax to be exempted. To qualify for a PRE you must own and occupy the property to be exempted prior to May 1 of the year exempted (see more information on qualifications above). To qualify for a Qualified Ag Exemption more than 50% of the property must be used for agricultural purposes (see more information on qualifications above).
Are there other exemptions from taxes individuals may qualify for?
There is an exemption for disabled veterans. See above Disabled Veterans Exemption information above. As tax law changes other exemptions may be available.