State Test Flashcards
Acre
LAND = 43,560 Sq. Feet
Additions - Which value does it affect and definition
- Taxable Value
The change in capped value that occurs as a result of: - physical change of the property.
- The inclusion of previously omitted property.
- Recognition of previously exempt property.
Adjustment
Positive or negative change made to the equalization process.
Approaches to Value
1 - Cost Approach
2 - Sales Comparison
3 - Income Approach
Assessable
Subject to tax, charge, or levy (all property; real and personal)
Assessed Value (AV)
The monetary amount at which a property is put on the assessment roll.
Assessment Roll
The public record of the assessed values and properties prepared by the assessor. Includes:
- Parcel No
- Ownership
- Descriptions
- Assessed and taxable value
Assessors Manual;
How many volumes and what do they contain?
Volume 1 - Cost data for residential and MOST agricultural structures
Volume 2 - Cost data for commercial & industrial structures, and some agricultural structure
Board of Review
Examines and reviews the roll for the current yea prepared by the assessor.
- Adds property previously omitted
- Corrects errors in name, descriptions, assessment & valuation
- Hears taxpayer appeals
- Endorses completed assessment roll
Bundle of Rights
Sell Lease/Rent Use Give away Enter/Leave Refuse to do any of these
Capped Value
Capped Valued =
(prior yrs TV - losses) X (The lower of 1.05 or inflation rate) + additions
County Equalization
County examines assessment rolls of cities and townships to determine that each class of real and personal property has been equally and uniformly assessed at a level of 50% TCV.
Cost Approach
Estimates the cost of constructing improvements to the land based on the principle of substitution.
Replacement cost of new - deprication + land value
- Use when there is not sufficient sales, new construction, or mass appraisels
Disabled Veterans Exemption
100% property tax exemption for disabled veterans and their unmarried surviving spouses. - Must own home - Homestead 3 Requirements: 1. Permanently & totally disabled 2. Specially adapted housing 3. Individually unemployable
Exempt Poperty
Explicitly recognized poperty that is not subject to taxation:
- Real Estate must be owned and occupied by the exemption claimant
- Claimant must be a library, benevolent, charitable, educational, or scientific institution
AND 3. The exemption exist only when the property is occupied for the sole purpose for which it was incorporated.
Headlee Amendment
Tax limitation amendment to the Michigan Constitution:
- Prohibits states from reducing its share of existing state-mandated programs and requires the state to reimburse local governments for any new mandated programs.
- Prohibits state from reducing the proportion of total state spending paid to all units of local government as a group below the proportion in effect in the fiscal year.
Income Approach
Used to value the income stream of property.
- Current value is directly linked to the property’s ability to render income in the future.
Loss - Which value does it affect and definition
AV
Assessment decreases resulting from reduced tcv because property was removed
1. assessment
2. property was destroyed or became exempt
3. property was removed from a parcel description
Losses - Which value does it affect and deifinition
Capped Value
Capped value reductions for property:
1. Destroyed or removed
2. That has become exempt
3. Decrease in value due to a decrease in occupancy rates
4. Decrease in value due to environmental contamination.
Market Value
Most probable sale price of a property in terms of money in a competitive and open market.
Michigan Tax Tribunal
The tribunal is an administrative court that hears tax appeals for all Michigan taxes.
New - Which value does it affect and definition
AV Increased assessment changes for reasons other than recognition of the result of the current equalization study: - Physical Changes - Changes in taxable status - Increase in market value
Omitted Property
Property that should have been assessed on a previous assessment roll but wasn’t.
Personal Property
Consist of every kind of property that is not real property, movable without damage to itself or the real estate;
- Tangible - Equipment
- Untangible - Financial Assets
Principal Residence Exemption
Exemption, up to 18 mills, of local school operating taxes given to the property that is the primary residence of the owner.
Property Classification
All tangible property divided in class depending on the CURRENT use of the property:
- Agricultural
- Commercial
- Timber-Cut Over
- Developmental
- Exempt
Property Transfer Affidavit
Form must be filed whenever real estate or some types of personal property are transferred.
- Must be filed within 45 days
- $5/day up to $200 penalty
- Must be completed even if you don’t register the deed.
Real Property
Ownership of land and anything permanently attached to the land.
- Consist of interest, benefits, and rights
State Equalization
State Tax Commission is required by law to examine rolls filed by each county and must determine whether the value of each CLASS is greater than, less than, or equal to 50% of the CLASSES tcv.
State Equalized Value (SEV)
Assessed value that has been adjusted by the direction of county and state equalization.
County Board of Commissioners and Michigan STC must review and adjust local assessments to meet constitutional threshold of below 50%
State Tax Commission (STC)
3 member appointments by the governer. STC has general supervision of the administration of property tax laws.
Taxable Value
Lesser of capped value or SEV (TV is tentative until STC adopts final equalization in may.)
-Can only increase by rate of inflation or 5%, whichever is less.
Transfer of OWnership
A conveyance of a title, or a present interest in, property is a transfer of ownership.
-Transfer of ownership only occurs when the taxable value is uncapped.
True Cash Value
The usual selling price at the place where the property is at the time of assessment.
- TCV and Market Value are not the same.
