State Equalized Value (SEV)
Once an Assessor has estimated the market value of a property, he is required to record 50% of that amount as the State Equalized Value. A home's State Equalized Value will change annually to reflect fluctuation of local property values. It will not increase radically unless major construction improves the property, or the property changes hands.

Taxable Value (TV)
Taxes are recalculated annually during the months of March and April. While a home's SEV will fluctuate due to the sale of similar homes during the past twelve months, the Taxable Value will increase with the rate of inflation.

This is calculated by multiplying the previous year's Taxable Value by the Consumer Price Index (CPI), but not to exceed 5%. Home improvements that add square footage to the home, such as the addition of four season room, are factored in. The result is the Capped Value for the current year.

Taxes are based upon the Taxable Value. The lesser of the State Equalized Value and the Capped Value become that year's Taxable Value.

How to Calculate Property Taxes
Realtors are required to show a home's current taxes on the listing information, but that figure is based on current Taxable Value. When a change of ownership occurs, the new owner's Taxable Value may be based on the property's current State Equalized Value.

Property taxes are calculated by multiplying the Tax Rate by the Taxable Value. Using a calculator for the home below, the Homestead tax rate for the City of Lansing (45.9519), is multiplied by the property's Taxable Value of $21,789 (rounded to the next thousand - 22).  Thus, 45.9519 X 22 = $1,010.   or simply "click" here to use the   State of Michigan Property Tax Estimator    IMPORTANT: When the property changes hands, the new Taxable Value will be based on State Equalized Value. Use that figure for calculating your annual taxes.