What is Proposal A?
On March 15, 1994, Michigan voters approved the constitutional amendment known as Proposal A which was designed to limit the growth in property taxes by the Consumer Price Index (CPI) until ownership in the property was transferred. Prior to Proposal A, property taxes were based on the SEV or assessed value of your property. Generally speaking, under the protection of Proposal A, increases in property taxes are limited to the rate of inflation or 5% whichever is less. Exceptions include transfers of ownership, new construction and changes in millage rates
What do I need to do when there is a transfer of ownership?
Under Proposal A, a Property Transfer Affidavit must be filed with the local assessor when there is a transfer of real property even if a deed is not recorded. This form is usually provided by the Title Company in your real estate closing, but many times a transfer of property does not use a Title Company. It is the responsibility of the new owner to file this form with the Assessor within 45 days of the transfer.
What is a Principal Resident Exemption (Homestead) and how does it affect my taxes?
In 1994, with the passage of Proposal A, the laws affecting how taxes are determined were changed drastically. One of the major changes was implementing a Homestead Exemption, now called the Principal Resident Exemption (PRE). Property owners are eligible for this exemption on the primary residence that they must own and occupy for 6 months every year. This exempts the property owner from paying local school operating millage. Currently, this is approximately 9 mills or $9.00 per every $1,000 of taxable value on your home. In order to be entitled for this exemption for the current year you must file a Principal Residence Exemption (PRE) Affidavit (Form 2368) for taxes on or before June 1 or on or before November 1.
Why are my taxes so much higher than last year?
If you purchased your property in the prior year, your taxable value was "uncapped." Uncapping is part of the change made in the tax laws in 1994 with the passage of Proposal A. There are two values placed on property; a Taxable Value and an Assessed Value. The Taxable Value is used to calculate your property taxes. The Assessed Value is 50% of fair mark value of the property. In the year following a transfer of ownership the Taxable Value and Assessed Value become equal. Depending on the difference of the two values, it may result in a sizable increase to your property taxes.
How can I protest my Assessment?
Every March the Board of Review meets to listen to petitions on property values. The Board of Review is a three-member board of Bridgman residents appointed by the Council. After meeting with the board of Review and getting their decision, a property owner can appeal further to the Michigan Tax Tribunal in writing.