What is the Assessed Value of a property based on?

The assessed value of a property is a critical figure used in taxation and is determined by a set percentage of its true cash value, which is the amount for which a property would sell in the open market. In Michigan, the standard assessment ratio is 50% of the true cash value. This means that when assessing a property, assessors will take the true cash value, which reflects market conditions and property specifics, and calculate the assessed value as half of that amount.

This methodology is intended to create a consistent approach to property taxation across the state, ensuring that property owners are taxed fairly based on the value of their properties without being overly burdensome. The assessment process involves various factors such as location, property condition, and recent sales data, contributing to an accurate reflection of property value for taxation purposes.

The other options do not align with the established practices in Michigan property assessment. For instance, assessing at 100% of the true cash value would not conform to the state’s regulations, and assessing at rates such as 75% or relating the assessed value directly to equalized values would not accurately represent the intent and approach mandated by Michigan law regarding property taxation.