The State of Michigan law is written which requires the taxing authority (Your City or Township) to assess property at 50% of the “usual selling price.” Properties are valued using a computer assisted appraisal system supplemented with current market data around the property. The assessed value is also influenced by the last sale.
Within six months of a home selling, the property’s taxable will become “uncapped” and will also be the same as the assessed value. This was changed in 1994 with Proposal A in Michigan. This law restricts increases in taxes to the CPI (Consumer Price Index) or 5%, whichever is less, until a future sale occurs. Additionally, new construction and voting to change millage will also modify taxes. Most likely they will go up.
Since 1994 all transfers of ownership must be filed on a Property Transfer Affidavit form. Usually, title companies supply the form at property closings. Many will also mail them to the Township or City that the home is located in that was just purchased. State law requires that the Property Transfer Affidavit be filed within 45 days of the transfer. A part of my service is to check in on these transfers within 30-45 days after the sale in sure State law is followed.
So what does this all mean? This means that the stated Taxable value and the current taxes on the MLS ( Multiple Listing Service) may not be what you endup paying in the future. Big surprise there, right?
When shopping for a home it is always wise to project these future tax amounts into your budget so you are not hit with an unpleasant surprise the year after. This usually comes in the form of the dreaded letter from your financial institution saying your escrow is short and they need to increase your monthly payment. Oh great right?
If you are looking to purchase a home in the future, give me a call. I want to help you understand the process, get educated and give you great unparalleled service at the same time. Lets sit down and discuss how I can make your next move easier. 616-437-1011