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A Note from The Treasurer: Understanding Your Property Taxes and Assessment

If you moved to the Township in the last year, congratulations and welcome! One thing we hear frequently from new residents is that their property taxes increase considerably after their first year. That’s due to Proposal A of 1994, where taxes are “uncapped” in the year following a home’s change of ownership. 

Here’s the good news. Proposal A was a constitutional amendment put in place in large part to “cap” or limit the increases in property taxes when residents stay in their homes. The amendment introduced the “Taxable Value” of a home, which is how property taxes are calculated (Taxable Value x Millage Rate). However, the Assessor still tracks the market value of your house, where “Assessed Value” is set to half of the market value. But no matter how much your home’s Assessed Value may increase, your taxes each year can only go up by the rate of inflation or 5%, whichever is less. Extrapolating forward, your home’s Assessed Value may increase at a higher rate than your Taxable Value, which works to your benefit in keeping increases to your taxes down. 

On the flip side, when a resident sells their home, the new owner will see their Taxable Value “uncap” and it is reset to match the home’s Assessed Value. This can lead to an issue when residents escrow their taxes with their mortgage company. The mortgage company will pay the tax bill we send them, but if there is an unexpected increase due to uncapping, the mortgage company may increase your escrow payment each month to account for the difference.

We invite you to try our fast, easy & secure online payment options:
Tax Payments
Water Payments

Please do not hesitate to call Township Treasurer Michael Schostak at 248-433-7705 or send an email with any questions on your tax or water bills. 

 

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