Overview & Department Function
The Assessing Department consists of the city assessor and an appraiser 3. Both employees are certified by the State Tax Commission as Michigan Advanced Assessing Officers.
The Assessing Department is the first link in the property tax revenue chain. The Assessor's responsibility is the discovery, listing, and valuation of all properties within the assessing jurisdiction. The primary purpose of the Assessing Department is to estimate the fair market value, or "true cash value," of all real and personal property located within the City of St. Clair Shores. The department studies the sales market and collects information about properties in order to estimate current market value.
The Assessor has the responsibility to study the transactions of the market and to appraise all property in accordance with market trends. The Assessing Department also keeps track of ownership changes, maintains maps of parcel boundaries, maintains legal descriptions for all land, and prepares sketches of all buildings and summarizes their characteristics. The office also tracks individuals and organizations eligible for exemptions and other forms of property tax relief.
General Definitions of Assessing Terminology
Within the context of the Assessing Department and its related activities, it is helpful to have a familiarity of major terms and concepts relevant to the property tax administration.
State Equalized Value or Assessed Value
The state equalized value or assessed value for a property represents 50% of its estimated fair market value. The assessed value is computed in the same manner as was the case prior to proposal A. 24 month sales studies are performed by the county equalization department to determine the total assessment increase by class (residential, commercial, industrial, personal).
Upon completion of county equalization, the Michigan State Tax Commission uses the same procedures to equalize each class of property in each of the 83 counties in the state. The local assessor's responsibility is to spread appropriately the class increase among all the various areas of the city, as determined by analysis of sales within each area.
The assessed value for a given property may increase or decrease to any amount that sales analysis indictates. Subsequent to the processes of county and state equalization, the assessed value becomes the state equalized value. In most contexts, assessed value and state equalized value are used in an interchangeable sense. The state equalized value does not become particularly relevant to most property owners until a property sells.
The taxable value of a property is the lower of that year's state equalized value or that year's capped value (see above). The essential significance of this is that a taxable value generally may not increase by more than 5% in a given year. Of the three valuation numbers listed in this section, the taxable value is the number which is of key interest to property owners.
A good rule of thumb is that for every $1,000 in taxable value change, there is about a $49 increase in annual property taxes for a homestead property, depending on the school district to which it pays taxes.
Example Illustrating Assessed & Taxable Value Calculations
Given: Assume 5% assessment increase for 2020;
1.4% inflation factor and $100,000 market value for 2020:
2020 SEV: $50,000
2020 Taxable Value: $50,000
2021 Assessed Value: $52,500 ($50,000 x1.05)
2021 Taxable Value: $50,700 (50,000x1.014)
Assessed Value Change: +2,500 ($52,500 - $50,000)
Taxable Value Change: +700 ($50,700 - $50,000)
Increase in Taxes: $35 ($700 X .050)
Uncapping the Taxable Value
Another important provision of proposal A is the concept of "uncapping the taxable value." The spread between the assessed value and taxable value may increase substantially over time, particularly with economic conditions of low inflation and strong real estate sales. In the case of a property that has sold, in the assessment year following the transfer of ownership, the taxable value and the assessed value are set to the same number. It is entirely possible for a situation to exist where identical houses on the same street may have dramatically different tax bills, resulting from one house having been recently sold and one which has not been recently sold. The impact of this provision increases over time.
2021 Assessment Roll Preparation
The equalization ratios for the 2020 assessment roll as determined by the Macomb County Equalization Department, are as follows:
- Residential - 47.09%
- Commercial - 52.51%
- Industrial - 49.41%
Records are available for inspection at the Tax, Water & Assessing Department located at City Hall. The office is open for inspection of records between the hours of 8:00 a.m. & 4:30 p.m. Monday thru Friday.