Michigan property taxes, explained
Michigan property taxes work differently than most states — and the difference can cost a new buyer thousands if they don’t see it coming. Here’s how they’re calculated, why your bill “uncaps” when you buy, the homestead exemption that saves you money, and what you’ll actually pay in Metro Detroit.
- Taxable Value — not market value — is what you're taxed on
- Your bill uncaps the year after you buy (budget for it)
- The homestead exemption (PRE) saves ~18 mills
How Michigan property tax is calculated
Three values drive your bill:
- True Cash Value (TCV):the assessor’s estimate of your home’s market value.
- State Equalized Value (SEV): by law, exactly 50% of TCV.
- Taxable Value (TV): the number you’re actually taxed on — the lesserof the current SEV or last year’s TV increased by the inflation cap (see below). TV is usually below SEV.
Your tax = Taxable Value × total millage ÷ 1,000(one “mill” is $1 of tax per $1,000 of Taxable Value). Example: a $100,000 Taxable Value at 40 mills = $4,000 per year. Michigan also levies a flat 6-mill State Education Tax statewide.
Proposal A: the cap that protects owners
Under Proposal A (1994), as long as you own the home, your Taxable Value can rise each year by only the lesser of 5% or the rate of inflation. The state publishes the “Inflation Rate Multiplier” annually:
- 2026: 2.7%
- 2025: 3.1%
- 2024: 5.0% (the cap — actual inflation was higher)
This is why a long-time owner’s taxable value can drift well below their home’s actual market value — and why the next part matters so much.
Uncapping: the surprise that hits new buyers
Here’s the big one. The year after a home sells, its Taxable Value “uncaps” and resets to the full SEV(50% of market value). The seller may have enjoyed years of capped increases — but as the new owner, you lose that protection, and your first full-year tax bill can be meaningfully higher than what the seller was paying.
Never budget off the seller’s current tax bill.Estimate your taxes using the SEV (roughly half the price you’re paying) times the local millage. A good agent and lender will help you project the uncapped number before you buy. Certain transfers — between spouses and some close relatives, or into some trusts — can be exempt from uncapping; confirm your specific situation with the local assessor.
The Principal Residence Exemption (PRE) saves you money
If you own and occupy the home as your primary residence, the Principal Residence Exemption (PRE, or “homestead”) exempts you from up to 18 mills of local school operating tax— a significant annual saving versus a non-homestead (rental or second-home) parcel.
- File Form 2368 with your local assessor/township.
- File by June 1 to take effect for that year’s summer bill, or by November 1 for the winter bill.
- When a home stops being your principal residence, file a rescission (Form 2602).
When buying, make sure the PRE is filed — it doesn’t always transfer automatically.
Summer vs. winter bills, and what you'll actually pay
Michigan bills property tax twice a year. The summer bill (mailed around July 1, commonly due July 31) is usually the larger one — it carries school operating tax and the state education tax. The winter bill (mailed around December 1, typically payable into mid-February) covers remaining county and local millage. The exact split varies by community, so check your local treasurer.
What it actually costs: effective property-tax rates run roughly 1.2%–1.3% of home valuein Metro Detroit, varying widely by community and school district. Oakland County’s effective rate is around 1.23%(a median bill near $4,500), and Macomb County’s around 1.28%(median near $3,400). Total millage typically ranges from about 30 to 70 mills depending on the city, schools, and local debt — with homestead (PRE) parcels about 18 mills lower.
Rates vary significantly by community — always check the specific city/township tax-rate sheet for an exact figure. Sources: Michigan Dept. of Treasury (inflation multipliers, PRE), and county/aggregator estimates for effective rates (approximate, 2026).
Michigan property taxes — common questions
How are property taxes calculated in Michigan?
Michigan taxes your home's Taxable Value — not its market value. Taxable Value is the lesser of the State Equalized Value (50% of market value) or last year's Taxable Value increased by the inflation cap. Your tax equals Taxable Value times the total local millage divided by 1,000 (one mill is $1 per $1,000 of Taxable Value).
Why did my property taxes go up so much after I bought my home?
Because of 'uncapping.' Under Proposal A, a home's Taxable Value increases are capped while you own it, but the year after a sale the Taxable Value resets to the full State Equalized Value (50% of market value). As the new owner you lose the prior owner's capped value, so your bill can be meaningfully higher than theirs. Always budget using the uncapped estimate.
What is the Principal Residence Exemption in Michigan?
The Principal Residence Exemption (PRE, or homestead exemption) exempts an owner-occupied primary residence from up to 18 mills of local school operating tax, saving you money each year. File Form 2368 with your local assessor — by June 1 for that year's summer bill, or November 1 for the winter bill.
How much are property taxes in Oakland County and Metro Detroit?
Effective property-tax rates run roughly 1.2%–1.3% of home value in Metro Detroit, varying widely by community. Oakland County's effective rate is around 1.23% (a median bill near $4,500) and Macomb County's around 1.28% (median near $3,400). Always check the specific community's tax-rate sheet, since millage differs by city and school district.
When are Michigan property taxes due?
Michigan bills twice a year. The summer bill is mailed around July 1 (commonly due July 31) and the winter bill around December 1 (typically payable into mid-February). Exact due dates and which taxes fall in each bill vary by municipality.
Questions about a home's taxes before you buy?
We’ll help you estimate the real, uncapped property taxes on any home — so there are no surprises after closing. Talk to a local expert.
2032 E Square Lake Rd Ste 400A, Troy, MI 48085