This publication is intended to provide answers to frequently asked questions regarding assessment terminology, assessment changes and Principal Residence Exemptions. If you have further questions please call our office at (734) 426-3767.
- What is the difference between SEV, Taxable Value and Assessed Value?
- Does the sale of a property change its taxable value?
- Does the assessment and taxable value on my property go up every year?
- If my SEV doesn't change, how can my taxable value increase?
- Will a home addition change my taxes?
- How are property taxes determined?
- What are the millage rates in Dexter Township?
- When are property taxes determined?
- I believe my property taxes are too high, what can I do?
- Will I be notified of changes in my assessment?
- How do I appeal my property assessment?
- What is a Principal Residence Exemption (PRE) and how do I qualify?
- I thought my Principal Residence Exemption (PRE) form was on file, but my tax bill showed me to be "0% PRE".
- I moved and filed a Principal Residence Exemption (PRE) for my new home. Do I have to do anything for my old home?
- Important dates.
Your property taxes are based on the value of your property. We assess your property to determine the value. The tax rate is then applied to the value of your property to determine your taxes. The Assessed Value of your property is based on 50% of market value as required by the State of Michigan. The Assessor considers a number of factors in determining the assessed value of a property. These include age, size, quality and type of construction, lot size, finished attics and basements, the neighborhood, and the selling price of similar properties in that area. In general, increases in market value result in an increase in assessed value. However, the sale price of an individual property does not necessarily determine its market value and property is not always assessed at 50% of a sale price. After the assessment rolls are reviewed and approved (the equalization process) by the County and State, the assessed values become the State Equalized Values (SEV). SEVs are not subject to a "cap".
Taxable Value is the value to which the millage rate is applied, thereby determining your taxes. The Taxable Value is the lower of the SEV or Capped Value. Taxable Value is subject to a "cap" and can be increased only by the amount of the Consumer Price Index (CPI) or 5%, whichever is lower. This results in another value called Capped Value. The CPI for 2011, as determined by the State of Michigan is 1.7%.
Capped Value = (Last Year's Taxable Value - Losses) x (the lower of 1.05 or the CPI) + Additions.
For all properties sold during a year, the Taxable Value is "uncapped" and must be the same as the SEV in the following year. There is no limit to amount of change in Taxable Value in the year after a property transfers. However, the next year the cap goes back on the Taxable Value. A property that has sold numerous times over the years will have a higher Taxable Value than a similar property that has remained with one owner, due to the repeated uncapping.
Changes in your property assessment and taxable value depend on changes in market values in your neighborhood and changes in the CPI. The following example demonstrates the changes that would occur with a 3% increase in market value and a 2.5% increase in the consumer price index.
If your prior year SEV is $100,000 and market values increased in your neighborhood by 3%, this means your current year SEV is: $100,000 X 1.03 = $103,000. If the CPI increase was 2.5%, your Capped Value is: last year's taxable value, $90,000 X 1.025 = $92,250. Your new Taxable Value would be the lower of the SEV or the Capped Value, or $92,250.
The Assessor is required by the State of Michigan to increase the Taxable Value by the rate of inflation (CPI). Your Taxable Value will not however, go higher than your SEV. The following example demonstrates the changes that would occur with no change in market value and a consumer price index increase of 2.8%.
If market values did not increase in your neighborhood, your SEV would be: last year's SEV, $100,000 X 1.0 = $100,000. If the CPI is 2.8%, your Capped Value is: last year's taxable value, $90,000 X 1.028 = $92,520. Your Taxable Value for this year is the lower of the SEV or the Capped Value, or $92,520. If there were no increase in the CPI or the SEV, your Capped Value and therefore Taxable Value would not change.
In addition to the CPI, increases in taxable value result from new construction, remodeling, and the value of property that may have been exempt from taxes or not included on the previous assessment roll. Decreases in taxable value result from the removal or destruction of property, or the value of property that has been exempted or removed since the previous assessment.
Market values increased in your neighborhood by 2%. Also, the appraiser for your area has estimated that your addition will add $50,000 to your current $200,000 SEV.
$200,000 X 1.02 =204,000 + $50,000 =$254,000. The CPI was 2.8% so your Capped Value is: last year's taxable value, $175,000 X 1.028 = 179,900 + $50,000 = $229,900. Your Taxable Value is the lower of the SEV and the Capped Value, or $229,900.
Property taxes are calculated by multiplying the millage (tax) rate per thousand dollars of Taxable Value of a property.
2012 Summer Millage Rates for all Dexter Township School Districts: 6.0000 mills for State Education Tax and 4.5493 mills for Washtenaw County Operating tax = 10.5493.
2012 Winter Millage Rates in Dexter Township by School District (100% PRE*)
Pinckney = 22.9547
Chelsea = 22.9547
Dexter = 23.1712
*Non-PRE properties add 18.0000 mills
Your property taxes are determined by December 1 each year. Summer taxes are due by September 14th and Winter taxes are due by February 28th of that year.
Claiming that your property taxes are too high and continue to increase is not a valid basis for an appeal. As mentioned previously, The State of Michigan requires the assessor to increase the taxable value annually by the CPI therefore the Taxable Value increases each year based on the Consumer Price Index or 1.05 whichever is less. To actually see a reduction in taxes, the Assessed Value (SEV) or Capped Value must decrease to less than the level of your current Taxable Value. To have a good basis for appeal you need to provide evidence which indicates the Assessed Value is in excess of 50% of the True Cash Value. This requires some fact finding on your part.
Notices of Assessment and Taxable Valuation and Property Assessment are mailed to property owners approximately the first week of March each year. Read your notice carefully paying particular attention to the Homestead Exemption applied. If you have questions or wish to appeal your assessment, contact the Assessor's Office.
The State of Michigan established the appeal process to assure that the property tax system would function in an equitable fashion. It is the taxpayers right to take advantage of this process. If after reviewing your Notice of Assessment, you wish to appeal your property assessment, contact the Dexter Township office to schedule an appointment at the March Board of Review Meeting. The exact dates for this meeting may be obtained by calling our office.
You will receive notification of the Board's decision regarding your appeal several weeks after the Board adjourns. This notification also provides you with information for further appeal to the Michigan Tax Tribunal (MTT) if you are not satisfied with the Board's decision. In order to appeal to the Michigan Tax Tribunal, you are required to first protest your property value before the local Board of Review and finalize payment on any property taxes you may owe. Appeals to the MTT must be filed by May 31 of the current year for Commercial, Industrial, or Developmental Class; by July 31 of the current year for Residential, Timber-Cutover, or Agricultural Class. Contact the Michigan Tax Tribunal at PO Box 30232, Lansing, Michigan, 48909 or 517-334-6521.
A Principal Residence Exemption (PRE) currently results in a reduction by 18 mills to your tax bill. You must own and occupy your home by May 1 to quality for a Principal Residence Exemption on your December tax bill. You may list only one home as your primary residence. Principal Residence Exemption forms are available in the township office or on-line and must be completed, signed and returned to our office for processing. Once processed, your property will be listed up to 100% PRE. If you purchase and occupy your home after May 1, and the property was previously Principal Residence Exempt, it will remain so for the upcoming tax year. You must however, file a new Principal Residence Exemption form listing yourself as the new owner so that your exemption is reflected the following year. If your property was not Principal Residence Exempt the previous year, and you purchase and occupy it after May 1, it will remain 0% PRE for that tax year. If you move into a new home after May 1, you do not qualify for a Principal Residence Exemption for that tax year. Assuming you file a Principal Residence Exemption form, your property will be Principal Residence Exempt the following tax year.
I thought my Principal Residence Exemption (PRE) form was on file, but my tax bill showed me to be "0% PRE".
If you miss the cut off date of May 1 to file your Principal Residence Exemption, you will notice that your home is listed as 0% PRE on your March Notice of Assessment. If you have lived at the property since May 1 you may appeal for a correction at the July or December Board of Review Meeting. If the Assessor and the Board agree that the property should have been Principal Residence Exempt, our records will be adjusted. If you did overpay in your tax payment, you will be issued a refund. If the board finds that you are not entitled to be Principal Residence Exempt for the year in question, you will be responsible for the entire tax amount including any penalties and late fees. The Board has jurisdiction to make corrections to the current year plus one year prior. Reimbursement for overpayment of taxes will be issued by the Washtenaw County Treasurer's Office.
I moved and filed a Principal Residence Exemption for my new home. Do I have to do anything regarding the Principal Residence Exemption I filed on my old home?
Yes, you must rescind the Principal Residence Exemption from your previous residence by completing and returning the rescind form to the township office where the old home is located.
Notices of Assessment and Taxable Value are mailed to property owners. A date for the BOR Meeting is set and advertised in the Dexter and Chelsea newspapers. Appointments to appeal are scheduled through our office.
A date for the BOR Meeting is set. Errors to Principal Residence Exemption and Agricultural classification and property assessments are corrected. Where approved, tax refunds for previous year errors are issued by Washtenaw County.
Tax bills for the current year are mailed to property owners on December 1. A date for the BOR Meeting is set and advertised in the Dexter and Chelsea newspapers. Errors to Principal Residence Exemption, Agricultural classification are corrected. Where approved, tax refunds for previous year errors are issued by Washtenaw County.
The final date to pay property taxes is February 28. After February 28, taxes are delinquent and late fees are applied. Washtenaw County will collect delinquent real property taxes.