Listed below are questions frequently asked and answered.
- When are my taxes due?
- I need a copy of a paid receipt. Where can I get one?
- Who receives the funds from my summer and winter tax bills?
- What do the terms Assessed Value, State Equalized Value and Taxable Value mean on my Notice of Assessment?
- How does the assessor determine my Assessed Value?
- What determines the Taxable Value?
- What other factors would cause an increase in my taxes?
- Property values in my neighborhood have been decreasing. Will my property valuation be decreasing as well?
- Does this mean I’ll have to pay more property taxes instead of less?
- Why won’t my taxes decrease if my property value is going down?
- Will my taxes ever go down?
- What are some of the disadvantages about the Proposal A legislation?
- What is the Principal Residence Exemption?
- Can I contest my Assessed Value and Taxable?
- How can I estimate my taxes from the Assessment Change Notice?
- What is a mill and, if I don’t have access to the internet, how can I determine my tax amount?
- Does Royal Oak accept credit cards?
- Why do I have to pay a convenience fee for credit card payments?
- Can I pay with credit card at the Treasurer’s Office?
When are my taxes due?
Summer property taxes are due in the Treasurer’s Office by 4:30pm on July 31. Winter property taxes are due in the Treasurer’s Office by 4:30pm on, or about, February 14. Please verify the due date on your current tax statement as the City of Royal Oak does not accept postmarks. There is also a 24-hour drop box located to the right of the Royal Oak City Hall front entrance. However, drop box payments received after 4:30pm on the last business day of July will be considered received on the first business day of August. All unpaid taxes belong to Oakland County as of March 1.
I need a copy of a paid receipt. Where can I get one?
The Treasurer’s Office can provide you with a copy of your paid tax bill. There is a $1.00 fee per page. If you’d like to avoid this fee, simply enclose a stamped self-addressed envelope along with the payment stub and your payment.
Who receives the funds from my summer and winter tax bills?
The summer tax bill is distributed to several entities: State of Michigan (education), Oakland Community College, Oakland Intermediate Schools (allocated and voted), local schools (allocated and voted), county operating, city operating, and all voted millages (currently refuse, fire, library and publicity). The winter tax bill is distributed to Oakland County Parks and Recreation, Huron Clinton Metro Authority and the Oakland County Public Transit Authority. Click here for a printable Tax Chart.
What do the terms Assessed Value, State Equalized Value and Taxable Value mean on my Notice of Assessment?
A basic knowledge of these terms will help you better understand Michigan property tax law.
- Assessed Value - the assessed value helps determine market value. Set by the assessor, the Assessed Value when multiplied by two will give an approximate market value of the property. The assessor is constitutionally required to set the assessed value at 50% of the usual selling price or True Cash Value of the property.
- State Equalized Value (SEV) – SEV is the Assessed Value that has been adjusted following county and state equalization. The County Board of Commissioners and the Michigan State Tax Commission must review local assessments and adjust (equalize) them if they are above or below the constitutional 50% level of assessment.
- Taxable Value – multiplying the Taxable Value by the local millage rate will determine your tax liability. Taxable value increases from year to year by the rate of inflation or 5%, whichever is lower. Transfers of ownership and improvements to the property will increase the Taxable Value more than the rate of inflation.
How does the assessor determine my Assessed Value?
To insure properties are assessed uniformly and at 50% of market value, the assessor uses a two year sales study that is provided by the Oakland County Equalization Department. A sales study is an analysis of the sales price of the property compared to its SEV. The sales are then organized by economic neighborhoods by the assessor. An economic neighborhood can be a single subdivision or a grouping of subdivisions with similar characteristics. If the sales in a certain economic neighborhood indicate an increase or decrease then all of the properties in that economic neighborhood will be changed by what the sales have indicated. This insures all properties are assessed at 50% of market value.
What determines the Taxable Value?
On March 15, 1994, Michigan voters approved the constitutional amendment known as Proposal A. The Taxable Value was created as a part of this legislation. Taxable Value, or the figure which millage would be multiplied against, can only increase each year by the rate of inflation or 5%, whichever is lower. The Taxable Value on the property is said to be "Capped" if the property owner has not had any additions or losses on the property or did not purchase it in the preceding year. The legislators who wrote and put Proposal A on the ballot intended to put a cap on the value of the property so that taxpayers wouldn’t be as affected by a robust housing market and a significant increase in valuation. The intention was to tie the increase in valuation to the inflation rate so that it would be more affordable for and would benefit those residents who intended to remain at their properties for longer periods of time.
What other factors would cause an increase in my taxes?
The Taxable Value is required by the Michigan Constitution to increase each year by the rate of inflation or 5%, whichever is lower. However, taxes can increase above this amount if the citizens of Royal Oak have voted for any special revenues, such as a school improvement bond or the city library millage.
Property values in my neighborhood have been decreasing. Will my property valuation be decreasing as well?
Unfortunately, there isn’t a yes or no answer to that question. If you’ve owned your property for a significant amount of time, more than likely your State Equalized Value (SEV) far exceeds your Taxable Value. If this is the case, a decrease in valuation, caused by a cooling real estate market, will be reflected in the SEV. In the case of a longtime property owner, the SEV could decrease, while the Taxable Value will increase.
Does this mean I’ll have to pay more property taxes instead of less?
In the previous scenario, yes you would. The Taxable Value will change by the inflationary rate, - .03% for 2010. This figure multiplied by the local unit’s millage rate will determine your new property tax liability.
Why won’t my taxes always decrease if my property value is going down?
Proposal A allowed many residents to pay property taxes on less than half of their market value by "capping" the Taxable Value, while still allowing the assessor to determine the market value by adjusting the SEV. This has caused, for many property owners, a great disparity between the SEV figure and the Taxable Value figure. The assessor can reduce the SEV to reflect the change in property value, but if the Taxable Value is still well below the SEV, it will change by the inflation rate until the two figures meet. Taxes are based on Taxable Value; therefore, you may end up with a tax increase if there is a positive inflation rate.
Will my taxes ever go down?
If a property’s value decreases each year, the SEV will eventually meet the Taxable Value. The Taxable Value cannot exceed the SEV. When this happens, decreases in SEV will cause decreases in Taxable Value, which will then lower your property tax liability. Due to the gap between the SEV and Taxable Value figures, it would take several years of depressed market conditions to make the SEV and Taxable Value equal. If you happen to be a property owner who purchased a property in the last few years and you have decreasing property value, the SEV and Taxable Value figures could meet sooner than someone who has owned the property for a long period of time.
What are some of the disadvantages about the Proposal A legislation?
Unfortunately, there have been a few downfalls. Two big downfalls that we hear regularly are:
- Neighbors with like properties paying completely different tax amounts.
- Uneasiness about moving to new properties because of the fear of a very high tax increase.
What is the Principal Residence Exemption?
If you own and occupy a home on your property before May 1 last year, you are entitled to a Principal Residence Exemption. This will result in a credit on your summer tax statement. On the Assessment Notice, the exemption will be illustrated by a 100.00% (homestead) if you are eligible or a 0.00% (non-homestead) if you are not. You are only entitled to one Principal Residence Exemption in or out of the State of Michigan. A property owner will pay a lower millage rate on their primary residence (approximately 15 mills less than a non-homestead property).
Can I contest my Assessed Value and Taxable?
Every property owner has the right to appeal their assessments. However, the opportunity only comes once a year and if the opportunity is missed, there isn’t another opportunity for that year. Your yearly Assessment Change Notice will provide you with the dates and times for the March Board of Review. If you wish to contest your assessment, you must make an appointment to appeal to the March Board of Review. A nonresident may protest to the Board of Review by a letter that is accompanied by a completed Board of Review petition. Protest at the March Board of Review is necessary to protect your right to further appeals to the Michigan Tax Tribunal for valuation and exemption appeals. In other words, the Michigan Tax Tribunal will not hear cases that have not first been before the local March Board of Review.
How can I estimate my taxes from the Assessment Change Notice?
Please visit the Treasurer’s Home Page on the city’s website to utilize the Property Tax Estimator.
Simply fill in the Taxable Value from your Assessment Change Notice and choose your school district. Select "calculate" and get an estimate of your upcoming tax liability. If you recently purchased your home, use half the purchase price for your taxable value estimate.
What is a mill and, if I don’t have access to the internet, how can I determine my tax amount?
One (1) mill is equal to $1.00 per each $1,000 in Taxable Value. If you recently purchased a
home use one half of the purchase price as your Taxable Value. For example, if your Taxable Value is 90,440 and the millage rate it 35.5836, your tax would be approximately $3,218.18 (90,440 x .0355836).
Does Royal Oak accept credit cards?
Royal Oak accepts credit card payments online through the Oakland County payment system. There is a fee for this convenience. Please click here to be directed to their site: http://www.oakgov.com/paytaxes/index.html.
Why do I have to pay a convenience fee for credit card payments?
PayLocalTaxes.com is a service provided by the Oakland County Treasurer to assist local governments within Oakland County in accepting tax payments online. A fee to purchase a Tax Statement or a Current Tax Profile is charged by Oakland County to recover costs associated with developing the technology required in providing this online payment service. In addition, all online payments will include an Enhanced Access Fee as provided by Public Act 462 of 1996, Enhanced Access to Public Records Act. This fee is based on a percentage of the total amount of the payment you are making online.
Can I pay with credit card at the Treasurer’s Office?
No. The ability to make electronic payments is only available online. There is a convenience fee for credit card payments of up to 3%. Check and cash payments can still be made at the Treasurer’s Office on the first floor of City Hall. Payments can also be mailed or placed in our 24 hour drop box located to the right of the front entrance to City Hall. Please keep in mind that the interest charge on late tax bills, as provided by city charter, is ½% per month from August 1st to February 28th. In most instances, it is a cheaper alternative to pay the late charge than to use your credit card for payment.