Torch Lake Township

5081 N US-31 \| PO Box 713 \| Eastport, MI 49627 \| Phone (231) 599-2036 \| Fax (231) 599-2981
Home Assessing Clerk Elected Officials Elections EMS Department Fire Department Links Minutes / Agendas Land Use Plan/Maps Newsletters Ordinances Planning Commission Staff Supervisor Township Board Treasurer Zoning Board of Appeals Zoning / Planning Site Map	How is Taxable Value Calculated? Taxable value, the value upon which your tax bill is calculated, is determined each year by comparing SEV/ASSESSED and CAPPED values and choosing the lower of the two. ASSESSED value is the assessor’s estimate of 50% of the market value of the property. CAPPED value is determined via the following formula: (Prior year taxable value – losses) x [CPI or 5% (which ever is lower)] + additions. LOSSES, in most cases, are equal to the taxable value of any buildings, or portions there of, that were removed or destroyed in the previous year. ADDITIONS, in most cases, are equal to the assessed value of any new buildings, or portions there of, that were built in the previous year. CPI is equal to the Consumer Price Index (i.e., the inflation rate) that was experienced in the State of Michigan in the prior year. This figure is determined by the Michigan Department of Treasury. Restated 2004 Taxable Value for a parcel of property is the LOWER of: 1) 2004 SEV for the parcel or 2) 2004 CAPPED VALUE for the parcel which is calculated as follows: (2003 Taxable Value - Losses) X (The lower of 1.05 or the Inflation Rate Multiplier of 1.023) + Additions. The following example shows the calculation of Taxable Value for a property, which had no physical changes during 2003 (meaning that the property’s land size was still the same and the buildings on the property were neither destroyed in whole or in part, nor improved, etc.). EXAMPLE: for a property whose market value increased by 2% for 2004 and there was not a "transfer of ownership" in 2003. Given: 2003 SEV = 50,000 2003 Taxable Value = 49,000 2004 SEV = 50,000 + 2% = 51,000 2004 Taxable Value is the LOWER of: 1) The 2004 SEV of 51,000 OR 2) The 2004 Capped Value which is calculated as follows: (2003 Taxable Value - Losses) X (The lowest of 1.05 or the inflation rate multiplier of 1.023) + Additions Since there are no additions or losses for this example, the formula for Capped Value is: (49,000 - 0) X 1.023 + 0 for Additions It can be further simplified as: 49,000 X 1.023 2004 Capped Value = $50,127 The 2004 Taxable Value is $50,127 (since this is lower than the 2004 SEV of $51,000.)

5081 N US-31 | PO Box 713 | Eastport, MI 49627 | Phone (231) 599-2036 | Fax (231) 599-2981

How is Taxable Value Calculated?

Taxable value, the value upon which your tax bill is calculated, is determined each year by comparing SEV/ASSESSED and CAPPED values and choosing the lower of the two. ASSESSED value is the assessor’s estimate of 50% of the market value of the property.

CAPPED value is determined via the following formula:

(Prior year taxable value – losses) x [CPI or 5% (which ever is lower)] + additions.

LOSSES, in most cases, are equal to the taxable value of any buildings, or portions there of, that were removed or destroyed in the previous year.

ADDITIONS, in most cases, are equal to the assessed value of any new buildings, or portions there of, that were built in the previous year.

CPI is equal to the Consumer Price Index (i.e., the inflation rate) that was experienced in the State of Michigan in the prior year. This figure is determined by the Michigan Department of Treasury.

Restated

2004 Taxable Value for a parcel of property is the LOWER of:

1) 2004 SEV for the parcel

or

2) 2004 CAPPED VALUE for the parcel which is calculated as follows: (2003 Taxable Value - Losses) X (The lower of 1.05 or the Inflation Rate Multiplier of 1.023) + Additions.

The following example shows the calculation of Taxable Value for a property, which had no physical changes during 2003 (meaning that the property’s land size was still the same and the buildings on the property were neither destroyed in whole or in part, nor improved, etc.).

EXAMPLE: for a property whose market value increased by 2% for 2004 and there was not a "transfer of ownership" in 2003.

Given: 2003 SEV = 50,000

2003 Taxable Value = 49,000

2004 SEV = 50,000 + 2% = 51,000

2004 Taxable Value is the LOWER of:

1) The 2004 SEV of 51,000

OR

2) The 2004 Capped Value which is calculated as follows:

(2003 Taxable Value - Losses) X (The lowest of 1.05 or the inflation rate multiplier of 1.023) + Additions

Since there are no additions or losses for this example, the formula for Capped Value is:

(49,000 - 0) X 1.023 + 0 for Additions

It can be further simplified as:

49,000 X 1.023

2004 Capped Value = $50,127

The 2004 Taxable Value is $50,127 (since this is lower than the 2004 SEV of $51,000.)