Property Assessments & Taxes

Until 1994, property in Michigan was assessed at half its market value for tax purposes. This is known as a property’s assessed value (AV).

In 1994, Michigan voters passed Proposal A, which changed the State’s constitution. Proposal A shifted some of the tax burden off of property and onto the sales tax, which rose from (4) to (6) cents on every dollar spent.

The result of this proposal was the development of a new way of calculating property taxes using what’s known as a property’s taxable value (TV). A property’s taxable value is determined using one of the equations (whichever one is less) below:

(Last year’s taxable value) – (losses) + (5%) + (additions); or
(Last year’s taxable value) – (losses) + (the rate of inflation) + (additions)

Under Proposal A, the growth of a property’s taxable value is limited or “capped” with annual increases of not more than the lesser of five percent (5%) or the Consumers Price Index (CPI), which is set by the Michigan State Tax Commission.

The taxable value cannot be greater than a property’s assessed value. However, when a piece of property is sold or a title is transferred, the property’s taxable value becomes equal to the amount of its assessed value for the tax year following the year in which the sale or transfer took place. This is called “uncapping” a property’s taxable value. After this has taken place, the lesser of five percent (5%) or the CPI applies to future increases in taxable value, until there is another sale or transfer of ownership of the property.

The taxable value for parcels in the City of Mount Clemens can be found on the parcel owner’s annual tax bill or assessment change notice.

In 1994, all properties became “capped” and the SEV then became the new Taxable Value.  From that point forward, Taxable Value could increase in the following three ways:

• Transfer of Ownership: When a transfer of ownership takes place on a property, the Taxable Value is uncapped to the Assessed Value for the following year.  From that point forward, the Taxable Value is capped until the next property transfer.
• Physical Changes to the Property: Any change in Assessed Value due to a physical change will also change the Taxable Value beyond the CPI increase.  Any loss in value will be subtracted and any new value will be added after applying the Inflation Rate Multiplier (CPI).  All assessments are based on what is physically on the property as of each December 31.  Most maintenance items such as roofs, siding, windows, etc., are not considered as a physical addition to the property.
• Inflation Rate Multiplier (CPI): Every year the State of Michigan calculates the Inflation Rate Multiplier (CPI).  The multiplier is calculated by statute, on the Consumer Price Index (CPI), as measured by the Federal Bureau of Labor Statistics and is based on a two-year average of the consumer price index based on the state fiscal year.  All property in Michigan will have an average increase based on the Inflation Rate Multiplier or 5% (whichever is lower).  The 2017 Inflation Rate Multiplier (CPI) is 1.009.

The property tax rate in Michigan is referred to as a millage, and it’s figured in mills. One mill is equal to 1/1,000 of a dollar.

More simply, for every $1,000 in taxable value, a property owner will pay $1 in property tax.

Each taxing jurisdiction has its own millage rate. These rates do not appear on City-issued assessment notices; however, Mount Clemens property owners can find out their millage rates by looking at their tax bills, or by calling the City of Mount Clemens Assessor’s Office at 586-469-6818 ext. 4.

Refer to Board of Review process and Michigan Tax Tribunal.