Under Michigan's Proposal A, which of the following correctly describes the relationship between taxable value, assessed value, and State Equalized Value (SEV) for a property that has been owned by the same person for many years in a rising market?
Correct Answer
B) Taxable value is less than SEV, and SEV equals 50% of assessed market value
In Michigan, for a property held by the same owner in a rising market over many years, the taxable value will be less than the SEV because the Proposal A cap limits annual increases in taxable value to the lesser of 5% or CPI, while the SEV tracks market value at 50% of assessed market value. The SEV is always defined as 50% of the assessed market value (true cash value). Therefore, in a rising market, taxable value < SEV = 50% of assessed market value. This three-way relationship is a uniquely Michigan concept that agents must understand.
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Related Topics & Key Terms
Key Terms:
Related Concepts
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
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.
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