Property Assessment and Taxable Value
Understanding Your Property Assessment and Taxable Value
The following is a brief explanation of how your Assessed and Taxable Values work.
The Assessor’s Office spends a considerable amount of time analyzing actual sales that have occurred over the past year in order to estimate property values as of December 31 of every year. A 24-month sales study, as required by the State Tax Commission, has been used to establish the proposed assessed values for 2021. The 24-month sales study covers a period from April 1, 2018 to March 31, 2020.
In February of each year, property owners will receive a Notice of Assessment, Taxable Valuation, and Property Classification. The Notice provides the property owner with pertinent information regarding their property. There are three important areas for review.
- The Notice provides the current year tentative valuations, the prior year valuations and the amount of change.
- The document will show if the property’s taxable value was "uncapped" as a result of an ownership transfer. The Notice will indicate whether there "was" or "was not" a change of ownership of the property during the previous year. If there was a transfer of ownership, the taxable value will "uncap" and be the same as the Assessed Value.
- The Notice will indicate the percentage of the property being used as a Principal Residence. If you own and occupy the property as your principle residence, the percentage indicated should be 100%. Property owners are encouraged to review each of these areas for accuracy. Please contact the Assessor’s Office if you should have any questions or concerns.
If the property owner is in disagreement with the valuations on the Notice, they may appeal to the March Board of Review. The meeting dates are listed on the Notice. Valuation disputes must be heard by the March Board of Review. The July and December Boards of Review do not have authority to hear valuation appeals.
Assessed Value represents 50% of the estimated property value. Taxable Value is a mathematical formula which is based on the preceding years Taxable Value increased or decreased by the Inflation Rate Multiplier (IRM). The 2021 IRM for the entire State has been determined to be 1.014 and is applied by each municipality. In addition to the IRM, Taxable Value may also increase for physical additions or decrease for physical losses. During 2021, the appropriate millage rates will be multiplied against the 2021 Taxable Value to determine the 2021 property taxes.
The following examples illustrate how the Taxable Value can change independently of the Assessed Value. If a homeowner has owned their home since the Constitutional Amendment, known as Proposal A passed in 1994, they could receive 2020 & 2021 value as follows:
||$162,240 (2020 Taxable Value x 1.014 IRM)
The previous example shows that Assessed Values can remain the same, while Taxable Values show an increase. This is a function of the statute. Taxable Value can never be higher than the assessed value.
The March Board of Review does not have the authority to change Taxable Value unless a reduction is made to the assessment that would affect the taxable value.
Notices of Assessment, Taxable Valuation, and Property Classification are mailed to all property owners of record in February. The IRM percentage is printed on the Notice. Please review the Notice carefully by checking mathematical calculations, principle residence exemption percentage and transfer of ownership information. Should you have any questions or concerns about your Notice, feel free to contact the Assessor’s Office at 248-347-0485 or email the Assessing Department.