The Charter Township Of Shelby
Assessed Value vs. Taxable Value
Prior to the change in the laws in 1994, taxes were calculated by multiplying the State Equalized Value (or SEV) by the millage rates in that year.
Beginning in 1994 the SEV and Taxable Value were the same number. In 1995 and thereafter, the Taxable Value is subject to a cap.
The cap is calculated by taking the previous years' Taxable Value, minus any losses sustained by the property, multiplied by the cap amount (the Consumer Price Index (CPI) or 5%, whichever is less), plus any new value to the property. This calculation is called the Capped Value.
This Capped Value is then compared to the SEV and if a transfer has not occurred in the previous year on the property, whichever value is less (SEV or CAP) becomes the new Taxable Value.
If a transfer did occur, the Capped Value does not apply to the property and the SEV becomes the new Taxable Value.