Posts Tagged ‘annual property tax increase’
Uncapping of Property Taxes Makes it to Michigan Supreme Court
March 30th, 2010
| Author: Dan A. Penning
The Michigan General Property Tax Act (the Act) requires real property in Michigan be assessed yearly and taxed at one-half (1/2) of its true cash value (true cash value is the same as market value). However, with the passage of the Headlee Amendment to the Michigan Constitution in 1994, limitations were placed on how much assessments and taxes could go up each year. Since 1994-1995, annual property tax increases have been “capped” at levels specified in the Act and remain capped until a “transfer of ownership” occurs. Once a transfer of ownership occurs, the property is reassessed at one-half (1/2) of the “true cash value” as of that date and the taxes, in most cases, go up substantially. The property tax is capped at the new, higher amount until the next transfer of ownership takes place (Michigan property tax bills show a “Taxable Value” and a “State Equalized Value.” The Taxable Value is the capped value upon which the property tax is assessed. The State Equalized Value approximates one-half (1/2) of the true cash value/market value of the property. Once the property tax is uncapped, the State Equalized Value and the Taxable Value become the same for the year in which the uncapping occurred and the cap goes back into effect at that amount).
Posted in Cottage Law, Cottage Law Attorney, Cottage Real Estate Laws, Direct Ownership, Family Cottage, Tenants in Common, Uncapping Property Taxes
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Tags: annual property tax increase, assessor, charlevoix, conveyance, Cottage Law, Cottage Succession Planning, headlee amendment, joint tenant, klooster, local board of review, lower tax revenues, michigan court of appeals, michigan general property tax act, michigan tax tribunal, new taxable value, real property, tenants by the entirety, terminate a joint tenancy, transfer of ownership, uncapping property values, vested sole ownership
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