Costs & insurance
Property tax
An annual tax levied by local governments based on a home's taxable value. Michigan's effective rates range from under 1% to over 2% depending on the county and local millages.
What does property tax mean?
Property tax is often the biggest reason two identically priced Michigan homes carry different monthly payments. The state's average effective rate is about 1.38%, but it runs under 1% in counties like Leelanau and Ottawa and above 2% in parts of Wayne. A Michigan quirk to budget for: the taxable value "uncaps" when you buy, resetting to roughly half of market value — so the previous owner's bill can understate yours. Lenders usually collect property tax through an escrow account and pay it on your behalf.
Common questions
How much is property tax in Michigan?
The average effective rate is about 1.38%, ranging from under 1% in counties like Ottawa and Leelanau to over 2% in parts of Wayne County.
Why is my tax bill higher than the seller's?
Michigan caps taxable-value growth while you own, but it uncaps when you buy — resetting to about half of market value. Budget from that, not the prior owner's bill.
Can I lower my Michigan property taxes?
Claim the Principal Residence (homestead) Exemption on your primary home to remove local school operating mills, and appeal your assessment if the taxable value looks too high.
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