The taxes are not calulated on the SEV. They are calculated on the taxable. If the taxable is less than the sev when you purchase the taxable they will go up to the SEV. You can not guarantee what the taxes will be in the future. The taxable can only go up the rate of inflation & no higher than 5%. The sev can go to whatever they feel is 1/2 the true value of the home.
Wish you the best
However, if price was higher than current half the SEV, will the assessor just say prices jumped and automatically raise the SEV? Or does it take many years for them to catch up to market trends?
This is assuming of course that the home was in equivelent condition. And if a basement was finished, how would an assessor know unless you appealed the taxes and they came and checked?
But the sev won't necessarily be half of the purchase price. It should be whatever the assessor has for the SEV value. However a sale of a home allows a accessor to re-look at a home for any improvement. So let's say the basement was finished or work was done that e never had a permit. The assessor can tack on value to the house and raise the SEV
Remember that all real estate is local. I read a national article yesterday that said an appreciation of approximately 3% in home values can be expected. Many of us experts in SE Michigan think that is low and it is going to be much higher. And, I am rather conservative by nature, as you may also be.
I am always happy to talk shop, so if you ever want to chat about this, I'd be happy to do so. Just send me a private message and I'll get you my cell, which I do not publish.
Meaning could the city/town increase the millage enough so that property taxes could increase more than 5% even though the taxable value of your home did not increase more than that?
As for the wing in SE Michigan real estate, it is horrible and mind boggling and has caused severe stress and panic to me. It is mind boggling how an area with higher than national average for unemployment and that has lost population. Especially given it doe snot seem other areas of the Midwest like Greater Cleveland, Pittsburgh, and Indianapolis are not seeing price increases? Or maybe they are seeing modest to in some pockets violent price increases just like we are, we just do not know about it?????
I would hope those other areas would be seeing the kind of price increases too so that way we would not be alone in the Mid West. Home price increases is not something we as Metro Detroiters should be proud of. At least we are not like Phoenix or Vegas where in those areas price increases have been far more violent than here
I think you saw my thread home prices panic last November and replied in that. My price range maximum has increased a little because my parents want me to be in a nicer area than some of what I was targeting and will contribute to the purchase price. So I am now willing to go up to $140K or maybe even $150K for a cash purchase, but want to ensure my taxes will be reasonable. I have researched the website you have me, but it is based on SEV and know which municipalities have low rates which is why I like Sterling Heights in Utica schools a lot and Shleby Township as the millage is so low. But if the price is too high and the SEV is reflected on that, then your taxes still may be too high.
Property taxes are a function of taxable value applied to the appropriate millage rate. Millage rates vary by municipality and school district. You can run through some hypotheticals at the link below.
Once you purchase the property, it becomes, "uncapped," meaning it can be adjusted to whatever the taxing authority feels it should be per their formulas. There are boards that meet twice per year where you can appeal that value and need to do so by presenting a solid case of non-distressed, nearby sales. Once it becomes, "uncapped," and adjusts to its new value, it can only increase the rate of inflation as deemed by the state, or 5% each year, whichever is less. Many people are actually now in a position where their homes are worth more then they are being taxed on given the swing in the market in SE Michigan.
In your example, it is impossible to say what it would become as the uncapping allows the government to do as they please. One can reasonably estimate, but not provide you a guarantee.
If you would like specific input, feel free to contact me.
Thanks and enjoy your weekend.