If you own property in Michigan, then you just received (or will soon receive) a Notice of Assessment, Taxable Valuation and Property Classification from your local city or township. The phrase “THIS IS NOT A TAX BILL” is printed at the top of the notice.

While you may be tempted to throw the notice in the bin, you should take time to carefully review it. The notice is not a tax bill, but it is very important because it establishes the assessor’s opinion of how your property will be taxed in the coming tax year and the looming deadlines if you want to challenge that opinion.

Here’s how to read the valuation information in the Notice:

The state equalized value/assessed value (SEV/AV) should be 50% of the property’s true cash value (TCV). True cash value is what the assessor has determined to be the fair market value of the property as of December 31 of the prior year. So for 2024, your SEV/AV should be 50% of what the assessor has determined to be the fair market value of the property as of December 31, 2023.

The taxable value is the amount of your property’s SEV/AV that is subject to taxation. Annual taxable value increases are capped under Michigan law to 5% or the inflation rate, whichever is less, with adjustments for any additions or losses to the property. Due to the capping rules, taxable value is typically lower than the SEV/AV. But when property is transferred from one owner to another, the taxable value will be “uncapped” in the year immediately following the transfer of ownership, and will be the same as SEV/AV.

If you believe the actual fair market value of your property is less than twice the taxable value stated on your Notice of Assessment, then you may challenge the assessor’s determination of value in the Michigan Tax Tribunal. But the law requires the property owner to act promptly. There are strict statutory filing deadlines for tax appeals, and certain types of property must be appealed first to the local assessor and/or local board of review in accordance with instructions provided on the notice — which may vary slightly from jurisdiction to jurisdiction. Do not wait to appeal your assessment. If you wait until you receive your summer tax bill, it will be too late.

Because Michigan law places a “cap” on the amount a property’s taxable value can increase year-to-year, reducing your taxable value through a tax appeal now, even by a relatively small amount, can provide continuing tax benefits for many years in the future, for as long as you own the property.

The notice also lists additional information regarding your property, including its classification and whether the property is entitled to an exemption under Michigan law, such as the principal residence exemption. You should review that information carefully to make sure it is correct.