SEV & Taxable Value Chart

Year Year 1 - 5
 Year 6 - 9
 Year 10 - 11
Inflation 3% 2% 2%
House Market Increases
 8% -1% -5%
Year SEV Taxable Value
 Comments
1 100,000 100,000 SEV going up just as the market does, Taxable Value capped at inflated rate.
2 108,000 103,000  
3 116,640 106,090  
4 125,971 109,272  
5 136,049 112,550  
6 134,689 114,801 SEV going down, Taxable Value still increasing per inflation rate.
7 133,342 117,097  
8 132,009 119,438  
9 130,690 121,826  
10 (Uncapped)
 124,156 124,156 House Sold in Year 9.
11 117,948 117,948 Taxable Value goes down because it cannot be higher than the SEV.
Summary
In summary, for many years homeowners have benefited from Proposal A. It has capped or limited the value used to calculate annual taxes to a level that is more sustainable. Proposal A does not work as well in a declining market because property taxes are driven by the taxable value, which increases annually by the rate of inflation, determined annually by the State of Michigan. As a result, taxable value often lags behind the state equalized value and can increase even though there may be a decrease in the state equalized value.