Common Terminology

True Cash Value (TCV) is also known as Market Value.  It is the usual selling price negotiated between a willing seller and a knowledgeable buyer as unrelated parties and without duress. 

Assessed Value - is approximately 50% of your Property’s True Cash Value.  The Assessed Value can increase or decrease annually based on the real estate market.

State Equalized Value (SEV) - is the Assessed Value after the assessment roll has been reviewed by the County and State.  The County and State ensure uniformity of Assessed Values to be at 50% of the Market Value.

Capped Value - The limit on the amount of the Taxable Value on a property. This value considers the prior year’s taxable value, the rate of inflation and any losses or additions to a property.

Capped Value Formula - (Previous Year’s Taxable Value-Losses) x Inflation Rate Multiplier (CPI) + Additions.

Taxable Value - Is the lesser of the Assessed Value and the Capped Value.  It is always the Assessed Value the year after a nonexempt transfer of ownership.

Classification - Categorizes your property by type of use.  This may be different than the zoning of a property.

Inflation Rate Multiplier (IRM) - Is a statutory required calculation by the State of Michigan which is calculated using the monthly values of the US consumer price index. (CPI)

Property Tax Calculation - Taxable Value x Millage Rate/1000. 

Millage Rate -The rate of taxation approved by voters of a particular District, City, State or County.

Transfer of Ownership - When a change of ownership of a property occurs.  This can be done by deed or land contract.

Uncapping - When the Taxable Value is set equal to the Assessed Value due to a transfer of ownership on a property.

Principal Residence Exemption (PRE) - An exemption from a portion of the School Operating Tax if you own and occupy a home as your principal residence.  Formerly known as Homestead.  This exemption must be claimed in writing by filing form 2368 Homeowners Principal Residence Exemption Affidavit.