The 2023 Michigan property tax assessment notices have been released, and taxpayers with properties that did not transfer in 2022 should notice a 5% increase in their taxable values. This increase is supported by Proposal A legislation, which was passed by Michigan voters in 1994, and included a cap on increases in taxable value for property tax purposes. The cap limits the annual increase in taxable value for each property to the rate of inflation or 5%, whichever is less. Tax year 2023 is the first time the annual increase will be 5%.
Under Proposal A, a property’s taxable value is equal to its capped value or its assessed value, whichever is less. The assessed value is determined based on the property’s true cash value (market value), subject to certain limitations and adjustments. Exceptions to Proposal A limitations are new construction or a change in ownership. Therefore, if a property transferred in 2022, the taxable cap value will be removed for tax year 2023.
Properties classified as commercial or industrial real estate can be appealed directly to the Michigan Tax Tribunal (MTT). Appeals can still be filed locally for such properties, but this is not a requirement. Properties classified as residential must be protested first to the local Board of Review (BOR) to file the MTT. The dates of the BOR will be listed on the assessment notice. Michigan’s deadline to appeal to the MTT is May 31.
Click here to learn more about the Michigan assessment and tax appeal process and to view the tax calendar.
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