Property Valuation
In Michigan, a property's 'taxable value' can never exceed its:
APrevious year's taxable value
BState Equalized Value (SEV)✓ Correct
COriginal purchase price
DReplacement cost
Explanation
Michigan law (Proposal A) requires that a property's taxable value cannot exceed its State Equalized Value (SEV). The SEV is reset to 50% of market value upon transfer; between transfers, the taxable value is capped at the lesser of SEV or prior taxable value plus the inflation adjustment.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
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