The equalization process is accomplished using sales and appraisal studies performed on individual properties in each of the six classes of real property (Agricultural, Commercial, Industrial, Residential, Timber Cut-Over and Developmental) and five classes of personal property within each of the townships. The Equalization Department does not determine individual assessments that is the sole responsibility of the five townships’ assessors. The taxable value is multiplied by the township millage rate to determine the amount of property tax, which is then levied by the township.
New construction on the property will also increase the taxable value. When a parcel transfers ownership, the taxable value becomes uncapped. Provided that ownership has not changed or there was no new construction, the taxable value of each parcel of property shall not increase each year by more than the increase in the general price level (inflation rate) or 5 percent, whichever is less, until the ownership of the of the parcel is transferred. An individual sale price is not always a good indicator of the true cash value of the property due to a variety of reasons such as uninformed buyers or sellers, insufficient marketing time and distressed or family sales. Your SEV or assessed value would be $40,000, which is 50% of $80,000, the true cash value. For example, let’s say you purchase a property from a friend, who gave you a deal and sold it to you for $70,000, but the property is actually worth $80,000 (market value). The State Equalized Value (SEV) or assessed value of your property is calculated at 50% of the true cash value (fair market value) of the property. State law requires that all property be assessed at 50% of market value. Under guidelines established by the State Tax Commission, the Equalization Department assists the County Board to determine the equalized value of the county. The director of the Equalization Department is appointed by the Board of Commissioners. The Keweenaw County Equalization Department has the responsibility of ensuring that the county tax assessment practices are equal and uniform throughout the county.
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