What is meant by “taxable value uncapping”?

Except for additions and losses to a property, annual increases in the property’s taxable value are limited to 5% or the inflation rate, whichever is less for continuous owners. In the year following a statutory transfer of ownership, that limitation is eliminated and the property’s taxable value is set at 50% of the property’s true cash value (i.e., the state-equalized value). This is what is meant by “taxable value uncapping”. See Michigan Compiled Laws (MCL) 211.27a(3).

Note: A property’s true cash value is usually not the same as its sale price for a variety of reasons. An assessor must determine the true cash value of a property that has sold in the same manner that the assessor determines the true cash values of properties that have not sold. Therefore, an assessor may not automatically set an assessed value or a taxable value at half of a property’s selling price. See State Tax Commission Bulletin No. 19 of 1997 and State Tax Commission Memorandum dated October 25, 2005, that describes the illegal and unconstitutional practice of “following sales.”

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1. What is meant by “taxable value uncapping”?
2. How do I know if I “uncapped”?
3. What does this mean for you?