The purchase of your home may not greatly affect the assessed value of your new property (contrary to popular opinion). The local assessor may not come out and reassess your property after they find out that a transfer has taken place, and your property's assessed value most likely will not automatically become 50% of what you paid for your property. What will happen, however, is still somewhat of a shock for some who are not aware of Proposal A.
Section 211.27 a of the Michigan Compiled Law states: "Upon transfer of ownership of property after 1994, the property's taxable value for the calendar year following the year of the transfer is the property's assessed value of the calendar year following the transfer."
What this means to you is that if you purchase your property this year, with a current assessed value of $53,400, and a taxable value of $48,200, in the year following the transfer you will be paying taxes on the new assessed value, which will include the market adjustment.
That new assessed value will serve as your base for all of the future adjustments on both your assessed and taxable values.
It becomes a matter of "buyer beware," as on several occasions most buyers are not made aware by anyone in their sales transaction that this is going to happen.
Most find themselves in difficult positions when they were led to believe that their property taxes were going to be a far less amount than the amount they are actually billed. This is a process that is mandated by the State Tax Commission. Local assessors must abide by these regulations.