At this time of year it's like that - when will the weather warm up??
A lot of people are calling to discuss their Real Estate Taxes - lots of unhappiness about the fact that the taxable values went up again.
Here, in Michigan, the Assessed Value or Taxable Value as it is sometimes known (that is the amount used to calculate your taxes) goes up each year by the Rate Of Inflation or 5% whichever is less.
Your State Equalized Value or SEV can go up any amount conceivable by the Assessor. It may also go down and we have seen this a lot more in recent years. The SEV is supposed to be nominally 50% of the Fair Market Value in Michigan. But it is complex - the Board of Equalization exists to make sure that all districts pay their fair share of the required taxes and that any one district does not contribute more or less than average to the County and State coffers.
So the question is Who decides on what the SEV should be and How do they make that decision.
????????????? wait a minute - the tax you pay is calculated using the Millage Rate and the Assessed or Taxable Value - so where does the SEV come in? - only when the property sells is the SEV of interest.
This is because the property taxes, on transfer of ownership become 'uncapped' - i.e. the Taxable Vaue (Assessed Value) becomes equal to the SEV.
So my question is what drives the SEV? - It's not entirely clear to this Real Estate Broker but I will try to explain if I find out more on the subject.
So here is the real problem with the SEV - when a property sells a document is generated called the Property Transfer Affidavit. This document finds it's way to the Assessor who then changes the Taxable Value to the value of the SEV.
So how do you sell a house whose asking price is $268,000 and whose SEV is $268,000
(The implication is that the New Owner will be paying tax at twice the rate he ought to.)
Because the Fair Market Value ought to be (generally speaking and in an 'arms length' transaction) twice the SEV. (State Rules)
This example illustrates a very common problem that we are dealing with in our market. The problem is putting a serious damper on sales of real estate.
It's time that the Board of Review members start to take these issues seriously because the current confidence in the Board of Review is not good.
As a Real Estate Broker I have been appalled at the lack of interest and the lack of real concern for the issues displayed by the Board of Review here in Pentwater.
Perhaps we might see some real effort by them to correct some of these anomalies in the system.
Also please don't imagine I lay the blame on the Board of Review - I am sure they have rules to abide by and I'm sure it's not the easiest of jobs and probably unpaid but if you are going to serve the public then get committed, I say.