SEV (STATE EQUALIZED VALUE) APPEAL
In the State of Michigan there are very specific laws that govern the taxation of real property by municipalities and the
process whereby the owner or his/her appointed representative may appeal that taxation. If you believe that the taxable
value (or capped value) times two (2) is more than the market value of your property, you have to look seriously at
appealing the taxable value and the SEV value when you receive the annual notice of change.
To appeal this notice, you must:
You have a very short time to prepare for the Board of Review for a residential property appeal so it is best
to start working on this as early as January 1st. If you are appealing commercial property taxes, it is imperative
that you have an appraisal completed by a Certified General Real Estate Appraiser as soon as possible.
It is important
that your Certified Residential Real Estate or Certified General Real Estate Appraiser is experienced in preparing
tax appeal appraisal(s) since the market value definition, prescribed by Michigan Law, must be incorporated into the appraisal(s)
and the comparables for your property must meet this very specific market definition, especially in regards to the type of
sale. In the end, presenting an appraisal that has been completed by an experienced
Certified General Real Estate Appraiser or Certified Residential Appraisal is the best plan in resolving the appeal successfully.
OF AVERAGE ARMS LENGTH SALES:
RATIO OF SEV VS. SOLD PRICE FOR 2009
RESIDENTIAL SALES IN WAYNE, OAKLAND AND MACOMB:
1.47:1 TO 1.58:1
RESIDENTIAL SALES IN WASHTENAW COUNTY: 1.83:1
COMMERCIAL SALES IN WAYNE, OAKLAND
AND WASHTENAW: 1.57:1
COMMERCIAL SALES IN MACOMB: 1.77:1
A home or commercial building sells in 2009 as an arm's-length transaction (private owner to private owner, no bank
involvement) for $100,000. The property's SEV for the year is $72,000, implying that the market value (SEV x
2) is $144,000. To find the ratio, you simply divide the sale price ($100,000) by the SEV ($72,000).
Therefore, the ratio of SEV to Sold Price is 1.39:1. If the SEV does not decrease in 2010, this property will be overtaxed
by about 30%.
As you can see from the most recent study of 2009 arms length sales (that does not include bank owned or
short sales per market definition for State Equalized Valuation, SEV), the SEV ratio is out of line with today's reduced market
values of residential and commercial real estate. A successful appeal may reduce you property tax 9% to 25%.
Example Residential: Saving $300/Yr. times 10 years, total savings of $3,000. Example Commercial: Saving $5,000/Yr.
times 10 years, total savings $50,000.
The cost of a quality appraisal to substantiate true market value
is very small in comparison. Our extensive experience from representing either municipalities or individuals
in residential and commercial property tax appeals has become priceless to our clients.