A property in Flint, Michigan has the following values: assessed market value of $300,000, SEV of $150,000, and taxable value of $110,000. The property is sold. What value will the taxable value reset to in the first tax year after the sale?
Correct Answer
C) $150,000, because the taxable value uncaps and resets to the SEV upon transfer
Under Michigan's Proposal A, when a property transfers ownership, the taxable value 'uncaps' and resets to the State Equalized Value (SEV) for the first tax year following the transfer. In this case, the SEV is $150,000, so the taxable value will reset from $110,000 to $150,000. This is a fundamental Michigan-specific tax concept that agents must understand and communicate to buyers, as it directly affects the buyer's ongoing tax liability.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
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