Property tax: assessments; the effect of certain limitations on the use of property, such as a restriction or easement in a deed, will, or other instrument; clarify relevance when assessing true cash value. Amends sec. 27 of 1893 PA 206 (MCL 211.27).
The amendments proposed in SB1125 highlight the necessity of considering location specifics, quality of soil, zoning, and existing usage limitations when assessing property value. Importantly, the bill stipulates that assessors cannot increase the assessed value of property due to improvements made for normal repairs, until the property is sold. This could significantly impact homeowners and realtors by creating a more predictable financial landscape for property transactions and assessments. Furthermore, it protects low-income households by ensuring that property improvements on their homes do not raise their tax liabilities until a sale occurs.
Senate Bill 1125 seeks to amend the General Property Tax Act in Michigan by clarifying the definition and assessment process for 'true cash value' as it pertains to the valuation of property. This bill is particularly concerned with the implications of property restrictions and easements on assessed value. By providing clearer guidelines on how true cash value should be determined, the bill aims to enhance consistency in property assessments across the state, potentially reducing subjectivity and disputes during tax assessments. The legislation defines 'true cash value' as the typical selling price for property while excluding various types of auction sales unless they are the common method of acquisition in the area.
Notable points of contention surrounding SB1125 include concerns about its potential impact on low-income housing. The bill amends how charitable nonprofit housing organizations are able to assess property during transfers to low-income individuals. Critics argue that the reliance on rigid definitions and assessments could unintentionally limit the availability of affordable housing if nonprofits are hindered in their ability to adaptively price properties based on regional and market changes. Proponents of the bill assert that clearer assessments will lead to greater fairness and transparency in property taxes, thereby assisting in funding necessary public services without disproportionately impacting lower-income residents.