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1. What are the Assessment Department responsibilities?

DEPARTMENT INFORMATION

The Assessing Department is responsible for the valuation of all residential, commercial, industrial, and personal property in the City of Livonia and answers inquiries from current residents, prospective home-buyers, and all members of the property purchasing process.

Inquiries with the Assessor’s office include:

• Legal descriptions and lot sizes
• Lot splits and combinations
• Ownership of property
• Personal property
• Property tax estimates
• Qualifications for filing State exemptions
• Disabled Veterans Exemptions

2. What is market value?

The market value of your property is simply the probable price that it would sell for in an arm's length transaction between a willing buyer and a willing seller. In Michigan, market value is defined as True Cash Value.

Determining a Property's Value

Determining a property's value is the Assessor's job, and is required for every piece of property, no matter how large or small. Also, each year the Assessor has to do the whole thing all over again, because the market value of almost everything changes from one year to the next.

The Assessor is required by state law to assess at 50% of true cash value all assessable property, as of December 31. This includes:

• Commercial properties
• Factories
• Homes
• Personal property (machinery and equipment for commercial and industrial properties)
• Vacant land

3. How are properties appraised?

To find the value of any piece of property, the Assessor must first gather all pertinent information in the community, such as real estate sales, construction costs, rental incomes, operating expenses. Interest rates and any other factors available. Utilizing the information collected, the Assessor can then go about finding a property's value in three different ways:

• Sales Comparison Approach: The first way is to find properties like yours, which have sold recently. Their selling prices must be analyzed very carefully to get at the true picture. One property may have sold for more because the buyer was in a hurry to occupy the property and would pay any price. Another may have sold for less because the owner needed cash right away and took the first offer.
• Cost Approach: The second way the Assessor values property is based on how much money it would take, at current material and labor costs, to replace your property with one just like it. If your property is not new, the Assessor must also determine how much it has depreciated due to normal wear and tear or other negative factors. In addition, the Assessor must estimate how much a lot like yours would be worth if vacant.
• Income Approach: The third approach measures a property's value by its ability to generate net income. In most cases, this approach is not used for houses unless it is used a rental property.

4. Why does the assessed value change from year to year?

The assessed value must reflect 50% of market value. As market values change, so does your assessment. 

For instance, if you add a garage to your home, the assessed value would increase. However, should your property be permanently damaged by fire, the assessed value would decrease. Property owners have a responsibility for reporting any changes to their property that would affect values. If you obtained a building permit, our office will be notified by the Building Inspector's Office.

5. What is capped value?

One such change is the "assessment cap". The language in Proposal A stated that, starting in 1995, the taxable assessment can be increased only by the amount of the consumer price index (C. P. I.) or 5% (whichever is less). However, other laws still require that the State Equalized Value (S.E.V) is to be 50% of the current market value. Since 1982, the S.E.V. and assessed value have been virtually the same. The capped value and the S.E.V. could be totally different.

In Summary:

• State Equalized Value (S.E.V.) equals half of the Appraised Market Value.
• Capped Value equals last year's taxable value increased by the Consumer Price Index (with a maximum of 5%) plus construction changes.
• Taxable Value equals the lesser of the State Equalized and Capped Values. The Taxable Value will be used for the calculation of property taxes.

For detailed examples, please visit the Understanding the Assessment Cap (PDF).

6. Why do assessments go up when a property hasn't changed?

Since assessments must be set by market value, changing real estate values in the community will be reflected in the assessments. Market value is a product of the prices paid for the property. As prices increase/decrease, so does market value.

All properties do not change in value to the same degree. Many factors influence values. Those properties with water or scenic views, for example, may well increase more rapidly than others.

7. How do you determine your tax bill?

Your property bill is the end calculation of multiplying your assessed valuation by the local millage rate. The Assessor simply reports the current assessed value of your property. You determine the amount of the tax by voting for, or against, local millages. You also determine the amount of tax by voting for elected community and school leaders who you empower to set millage rates within specified limits.

Remember: A general increase in assessment can be negated on the tax bill by a general decrease of the millage rate.

8. What are your rights and responsibilities?

If your opinion of the value of your property differs from the Assessor's, by all means, go to the office and discuss the matter. The staff will be glad to answer your questions and explain how to appeal if you cannot come to an agreement. The Assessor's Office relies on the property owner for information. You can help by providing accurate information.

If you feel taxes are too high, you should make your opinion known to the proper taxing authorities. Be sure to take advantage of the state's property tax relief programs. We're here to help you. Just ask!

9. What is capped value?

One such change is the "assessment cap". The language in Proposal A stated that, starting in 1995, the taxable assessment can be increased only by the amount of the consumer price index (C. P. I.) or 5% (whichever is less). However, other laws still require that the State Equalized Value (S.E.V) is to be 50% of the current market value. Since 1982, the S.E.V. and assessed value have been virtually the same. The capped value and the S.E.V. could be totally different.

In Summary:

• State Equalized Value (S.E.V.) equals half of the Appraised Market Value.
• Capped Value equals last year's taxable value increased by the Consumer Price Index (with a maximum of 5%) plus construction changes.
• Taxable Value equals the lesser of the State Equalized and Capped Values. The Taxable Value will be used for the calculation of property taxes.

For detailed examples, please visit Understanding the Assessment Cap (PDF).

10. Understanding the 3 Values used in Assessing?

True Cash Value (TCV) ………………………………  The market value of your home. 

State Equalized Value( SEV)………………………… Half of the true cash value. (a.k.a. Assessed Value)

Taxable Value (TV) …………………………………… The value used to calculate your property taxes