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The Assessor’s Office is responsible for determining the valuation of over 2,400 parcels within Olive Township. In accordance with Michigan General Property Tax Law, the Assessor’s Office must discover and value all parcels, both Real and Personal that are not exempt by law. Real property is typically land and buildings while personal property is typically equipment, furniture and fixtures owned by commercial, industrial and utility companies.
Michigan Law requires Assessed Values (AV) to be uniform according to the value of the property and represent a value that does not exceed 50% of market value. Assessed Value goes up and down with the real estate market and there are no limits on the amount of change. State Equalized Value (SEV) is typically the same value as assessed. However, the amounts can differ if the County Equalization Department determines the Assessor is not assessing at 50% of market value.
Below is a collection of information regarding everyday inquiries in the Assessing Department, including calculations for the Taxable Value. If you have any questions regarding your assessment or any other related question, please feel free to contact Tyler Tacoma at the township office on Wednesdays or via email anytime.
Property Site Visits
The Assessor’s Office makes several property visits throughout the year. Most notably, the Assessor and/or staff visits all sites that have been issued a building permit for that year. Most of these appraisal reviews of new construction are completed in the winter toward the end of the year. From an assessment perspective, the valuation for the upcoming year’s assessment roll is based on “whatever the property looks like on ‘Tax Day,’ December 31st.” In other words, a new house that is only 50% completed as of year end will have an assessment in the upcoming year that reflects partial construction. The Assessor’s Office will then return to that property the following year to verify that the work was completed, and change the partial construction assessment to a completed house assessment for the subsequent year.
Based on this timeline and the necessity that the Assessor’s Office keeps a current project status of properties as of December 31st, several site visits must take place in the last few weeks of the year. In order to maintain an efficient schedule, the Assessor’s Office usually goes on neighborhood-wide permit reviews stopping at several sites throughout the day. If you have a project going at your home and would prefer a scheduled appointment, please do not hesitate to contact our office and we will arrange a site review. In addition, if your project is completed before the end of the year, please feel free to contact us as we would be more than happy to complete our appraisal and assessment review of your home earlier in the year.
The second type of property visits are part of an ongoing review recommended by the State Tax Commission. In order to keep assessment records current and accurate we visit 20% of our properties on an annual basis. These visits involve taking current outside pictures, checking building measurements, and looking for physical changes to the property.
When completing any type of fieldwork, assessing staff will have Olive Township business cards or other official identification such as this car door magnet:
Taxable Value (TV) Calculation
Starting in 1995, Taxable Value (TV) has been calculated independently of the State Equalized Value (SEV). The current year Taxable Value can be defined as:
TV is the lower of:
Current year SEV
Prior year TV − Losses × CPI (Consumer Price Index) + Additions
Losses may be fire damage, demolition, etc. Additions may be new construction, remodeling, etc. CPI is the inflation rate as determined by The State Tax Commission and cannot be greater than 5%.
Taxable Value is uncapped when a transfer of ownership of a property occurs. This means that the TV will be the same as the SEV in the year following the ownership change. Please contact the Assessing Office with questions regarding transfer of ownership.
The Taxable Value is the value used by the Treasurer’s Office to apply to the millage rate to calculate your tax bill.
How Your Property Is Assessed
The market value of your property is simply the probable price that it would sell for in an arm’s length transaction between a willing buyer and a willing seller. The Assessor is required by state law to assess at 50% of true cash value/market value all assessable property, as of December 31, of each year. This includes agricultural, residential, commercial, industrial, and personal property (machinery and equipment for commercial, industrial and utility properties).
The Assessor takes various factors into account when establishing property value, including:
- Description of the property/land and its improvements
- Lot size
- Age of home and/or other buildings
- Land value
- Building square footage
- Value-enhancing amenities (such as paved road, utilities available, topography, etc.)
Filing Requirements - Principal Residence Exemption (PRE) and Property Transfer Affidavits
With the passage of Proposal A in 1994 came rules and regulations that impact your property tax assessment. When purchasing a piece of property, either improved or vacant, you are required by law to file with your local government a Principal Residence Exemption (PRE) Affidavit and a Property Transfer Affidavit. Terms such as “capped value” and “taxable value” have become part of the assessment and taxation procedure.
- State Equalized Value (S.E.V.) is half of the Appraised Market Value/True Cash Value
- Capped Value is last year’s taxable value increased or decreased by the amount of the Consumer Price Index (CPI) with a maximum increase of 5%) plus additions and minus losses to the property.
- Taxable Value is the lesser of the State Equalized and Capped Values. The Taxable Value will be used for the calculation of property taxes.
Principal Residence Exemption (PRE) Affidavit: This affidavit allows you to claim an exemption from some school operating taxes. For your homestead to be eligible, you must own and occupy it as your legal principal residence as of June 1 starting with summer taxes, and November 1 for winter taxes. This affidavit must be filed with the township or city in which your property is located. You only need to file this form once.
Property Transfer Affidavit (PTA): Any time a transfer of ownership takes place on a property, the buyer or grantee (person receiving the property) is required by Michigan State Law to file a Property Transfer Affidavit with the local Assessor’s Office within 45 days of the transfer.
The PTA is a one page form that must be filed with the local Assessor’s Office for typical sales between unrelated buyers and sellers. In addition, it is also a required filing for any transfer of ownership. Some examples are a transfer to a trust, transfer to a spouse, sale of property using a land contract, quit claim deed, giving property to children or other estate planning transfers, foreclosures, etc.
The three main reasons this form is important to the local Assessor are:
- The Assessor needs to know who the current owner of the property is so that the taxes are billed to the appropriate person.
- The sale price must be given on this form, whether it was or wasn’t shown on the deed and whether or not the purchase price reflects the actual market value. The sale price is vitally important as it helps the local Assessor’s Office know what properties are currently selling for in the real estate market. Along with the sale price, items 10-15 on the form help the Assessor determine if the sale was a typical market transaction or if there were other factors that affected the sale price such as: purchasing from a relative at a discount, short sale at a reduced price before a foreclosure, a land contract with an excessive interest rate, or a purchase that included other items such as a vehicle or other personal property (appliances, furniture, etc.).
- The transfer of ownership may or may not require an “uncapping” of the taxable value. Normally, the year after a property sells, the taxable value is “uncapped” and reset to whatever the property’s assessed value is. However, in some cases, the transfer of ownership may be exempt from “uncapping” of the taxable value. The information provided on the property transfer affidavit allows the Assessor to determine whether or not to uncap the taxable value.
Per state law, if this form is not filed with the local Assessor’s Office within 45 days of the transfer of ownership, a penalty of $5/day (maximum $200) could be applied to the property’s winter tax bill. Filing of the form by the buyer is a win/win situation that ensures the correct person receives the tax bills and that the Assessor’s Office gains valuable information about sales activity in the local market.