Assessing: A Brief Description

In the State of Michigan an assessor must be certified in order to sign the assessment roll. There are 4 levels of certification that are based upon the valuation levels set by the State Tax Commission. The City of Charlotte currently requires the assessor to be certified as a level 2 which means the total assessed value of Charlotte is less than $488,000,000.

The assessor’s primary job is the preparation of the assessment roll each year. The assessment roll is simply a listing of each and every parcel of real and personal property within the city limits including the owners name, address, parcel number, legal description, assessed value, taxable value, Principle Residence status, school district, property classification as well as changes made by the Board of Review, Michigan Tax Tribunal or the State Tax Commission.

The preparation of the assessment roll is an annual event. After the prior year values have been certified by the March Board of Review the assessment cycle begins. Each year the assessor’s office must recalculate the value of each parcel of real property. The value of real property is generally the sum of the land value, site improvements and the building value. The total of these items make up what we refer to as the True Cash Value of the property. Every year a new analysis must be done to determine the land and building values. This is done on a mass scale using factors and ratios that are them applied to different areas or to different styles or ages of homes. The assessed value is 50% of the True Cash Value.

Valuation changes begin with the results from the equalization study by the Eaton County Equalization Department. That study compares recent sales with their assessed value. In a perfect world the assessed value would be exactly 50% of the sale price. However this is rarely the case. The more difference there is between the sale price and the assessed value the more change there will be to the values for that year. The changes that are calculated are not applied to individual properties but to groups of properties based on their location, style, age or some other common element. There is not limit as to how much the assessed value can change from one year to the next.

While the assessed value is not limited in the amount it can change the “Taxable Value” is! The taxable value is the number that your property tax is based on. When this number changes so does your tax bill! The taxable value came into existence with the passing of “Proposal A” in 1994. Proposal A limits the change in taxable value to 5% or the rate of inflation whichever is less. During times of increasing property values this kept the taxes from increasing at that rate.

Proposal A also included the Principle Residence Exemption which allowed for and exemption from the 18 mill school tax for a resident owner.

After the new values are determined, notices are mailed to the property owner showing the proposed value for the next year. At this time the taxpayer may appeal the proposed value to the March Board of Review. This is the time when an appointment can be made to meet with the board and to provide proof of why the value should be changed. The board of review meets for a very limited time and it important to keep this in mind if the valuation appears to be out of line. After the board of review adjourns the process starts all over again.

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