Berg Assessing & Consulting
Allan Berg: Office 546-4030
ASSESSING OFFICE DUTIES
The Assessors Office is responsible for determining the valuation of approximately 1,900 parcels within the Township of Cohoctah. In accordance with Michigan General Property Tax Law, the Assessor's Office must discover and value all parcels, both Real and Personal that are not exempt by law. Real property is typically land and buildings while personal property is typically equipment, furniture and fixtures owned by commercial, industrial and utility companies.
Michigan law requires Assessed Values (AV) to be uniform according to the value of the property and represent a value that does not exceed 50% of market value. Assessed Value goes up and down with the real estate market and there are no limits on the amount of change. State Equalized Value (SEV) is typically the same value as the assessed value. However, the amounts can differ if the Livingston County Equalization Department determines the Assessor is not assessing at 50% of market value. The market value of your property is simply the probable price that it would sell for in an arm's length transaction between a willing buyer and a willing seller.
The Assessor is required by state law to assess as 50% of true cash value all assessable property, as of December 31, of each year. This includes agricultural, commercial, industrial, residential and personal property (machinery and equipment for commercial and industrial properties).
The Assessor takes various factors into account when establishing property value, including:
Description of the property and its improvements
Age of home and/or other buildings
Building square footage
PROPOSAL A EXPLANATION
In 1994, Michigan voters approved a constitutional amendment know as Proposal A. Proposal A was designed to limit the increase in property taxes to either 5 percent or the annual change in the Consumer Price Index (CPI), whichever is less, until ownership of the property is transferred.
Prior to Proposal A, property taxes were based upon the State Equalized Value (SEV), which is equal to 50% of the market value of your property. With the implementation of Proposal A, property taxes are now based upon the Taxable Value (TV). Taxable Value is the lower of SEV or Capped Value.
Capped Value (CV) is a mathematical calculation where the assessor must multiply the previous year's Taxable Value by the lesser of CPI or 5%, then compare the two values and choose the lowest to be the new Taxable Value. The CPI for 2011, as calculated by the State of Michigan, is 1.7 percent statewide.
Under the protection of Proposal A, in any given year, the Taxable Value (TV) will increase no more than the CPI or 5 percent, whichever is less (plus any additional value caused by property improvements). If the State Equalized Value (SEV) is less than the Capped Value (CV) when compared, then the SEV becomes the TV.
The Taxable Value (TV) is uncapped when a transfer of ownership of a property occurs. This means that the TV will be the same as the State Equalized Value (SEV) in the year following the ownership change.
The Taxable Value (TV) is the value used by the Township Treasurer's Office to apply to the millage rate to calculate your tax bill.
DECLINING HOUSING MARKET
In a booming or declining market, a property's SEV will rise or fall with the market, while a property's Taxable Value (TV) will remain at a steady, gradual increase. This is because the TV is not tied to the market, but rather to the lesser of 5 percent or CPI under the protection of Proposal A. The gap between SEV and TV has grown over the years. The SEV is about 14 percent higher than the TV. Even though the SEV will fall with the market, the CV will still be considerably lower, thus the TV will still be increased by the CPI under the protection of Proposal A.
Assessed Value (AV): The value set by the assessor to reflect 50% of market value.
State Equalized Value (SEV): The Assessed Value plus any adjustment factor by the county and state to equalize the assessed value to 50 percent of the market, if the assessor's value falls short of market value. The Township of Cohoctah consistently has a factor of 1.00, or no adjustment.
Consumer Price Index (CPI): The annual national inflation rate from October to October.
Capped Value (CV): The figure derived from multiplying the previous year's Taxable Value (TV) by the Consumer Price Index (CPI).
Taxable Value (TV): The amount upon which property taxes are levied. The taxable value is the lesser of the SEV and CV. Taxable value is utilized for the calculation of property taxes.
ASSESSING FORMS - PURPOSE
Affidavit for Principal Residence Exemption: This affidavit allows you to claim an exemption from some school operating taxes. For your homestead to be eligible, you must own and occupy it as your legal principal residence as of May 1. This affidavit must be filed with the township or city in which your property is located. You only need to file this form once.
Property Transfer Affidavit: This form must be filed whenever real estate or some types of personal property are transferred (even if you are not recording a deed). It is used by the assessor to ensure the property is assessed properly and receives the correct taxable value. It must be filed by the new owner with the assessor for the city or township where the property is located within 45 days of the transfer. If it is not filed timely, a penalty of 5$/day (maximum $200.00) applies. The information on this form is not confidential.