Terms and Definitions

Yes

ADDITIONS and LOSSES

“Additions” means all increases in value caused by new construction, a physical addition, or “omitted” property that was previously existing tangible real property and that the value of the property was not included on the assessment in the unit of government in the preceding tax year’s assessment roll (MCL 211.34d(1)(a)& (i)).

This does not include replacement construction of previously assessed tangible real property. Construction for routine repairs and maintenance are excluded as “additions” through the Matthieu-Gast Act.

“Losses” means all decreases in value caused by the removal of construction of tangible real property that was included on the unit of government assessment roll in the prior year.

ASSESSED VALUES

Assessments are arrived at by the use of a mass appraisal practice. The prime object of mass appraisal is for taxation purposes to equalize property values. Not only are the values of one residential property to be equalized with another, but it must also be equalized within each class of property, such as: Residential, Commercial, Industrial, or Agricultural.

The common basis for equalization is the fair market value: that price which an informed and intelligent person, fully aware of the existence of competing properties and not being compelled to act, is justified in paying for a particular property.

PROPERTY CLASSIFICATION

All properties are classified according to the rules regulated under the General Property Tax Act 211.34c. The classifications of property are:

Residential, Agricultural, Timber-cutover, Commercial, Industrial, Developmental, and Personal Property.

Classification is determined based on the properties highest and best use and is not regulated under the local unit zoning designations. Please visit the Building Departments web page for more information regarding zoning regulations.

MILLAGE RATES

The Voter approved Millage rates are calculated as dollars per $1,000 of taxable value. The Millage rates are made up of different taxing jurisdictions; such as: the City or Township, County, Public School, and taxing authorities like the Community College.

Please visit the Treasurers web page under Tax Rate Schedule for more information on the current Millage rates in your school district.

STATE EQUALIZED VALUE

Prior to 1994, and the enactment of Proposal A the State Equalized Value (S.E.V.) was utilized in the calculation of the annual tax bill.

The STC governs the rules and regulations of the assessment process. Their primary responsibilities are to monitor each unit of government to insure that the assessments are in compliance with the State laws.

The State Tax Commission will hold Preliminary State Equalization meeting on the Second Monday in May and a Final State Equalization meeting on the Fourth Monday in May regarding the six separately equalized property classifications of real property plus personal property.