What is the difference between the Assessed Value and Taxable Value of my home?
Assessed Value is defined by state law as 50% of the market value of the property as of December 31st of the preceding year. Taxable Value is derived from a formula created by Proposal A in 1994, designed to limit tax increases at the rate of inflation. The formula is: (Previous Taxable Value – Losses) x CPI + Additions = Current Year’s Taxable Value Losses are defined as physical changes to the property that result in a loss of value…i.e. demolishing a garage. CPI is the consumer’s price index as calculated by the State of Michigan each October. Additions are defined as physical improvements to the property that add value and were not previously assessed…i.e. adding a deck.
Assessed Value is defined by state law as 50% of the market value of the property as of December 31st of the preceding year. Taxable Value is derived from a formula created by Proposal A in 1994, designed to limit tax increases at the rate of inflation. The formula is: (Previous Taxable Value Losses) x CPI + Additions = Current Years Taxable Value Losses are defined as physical changes to the property that result in a loss of valuei.e. demolishing a garage. CPI is the consumers price index as calculated by the State of Michigan each October. Additions are defined as physical improvements to the property that add value and were not previously assessedi.e. adding a deck.
