Cost of owning
Michigan property tax, explained
Short answer
Michigan property tax is your home's taxable value multiplied by the local millage rate. The statewide effective rate runs roughly 1.3% to 1.5% of a home's market value — on the higher side nationally. Your primary home gets a break through the Principal Residence Exemption (the 'homestead' exemption), and a 1994 law caps how fast your taxable value can climb — until you buy, when it 'uncaps' and can jump.
How Michigan property tax is calculated
Every Michigan property has two values that matter. The State Equalized Value (SEV) is about half of what the home would sell for. The Taxable Value is the number your tax bill is actually based on.
Your bill is the Taxable Value times the local millage rate. One mill equals $1 of tax per $1,000 of taxable value, and every community sets its own total millage — schools, county, city or township, and special levies stacked together.
The Proposal A cap — and why it 'uncaps' when you buy
Since Proposal A passed in 1994, a home's Taxable Value can rise each year only by the lesser of inflation or 5%, for as long as the same owner keeps it. That protects long-time owners from runaway tax bills even when home values surge.
Buying resets it. The year after a sale, the Taxable Value 'uncaps' and jumps up to the SEV. For a home the seller owned a long time, that can push your bill well above what they were paying.
The homestead (Principal Residence) exemption
Michigan's homestead break is officially the Principal Residence Exemption, or PRE. It exempts your primary home from up to 18 mills of local school operating tax, which is a meaningful chunk of a typical bill.
You claim it by filing Form 2368 with your city or township, usually right after you buy. It only applies to the home you actually live in.
- Qualifies: the home you own and occupy as your primary residence
- Does not qualify: second homes, vacation homes and rental property
- Action: file the PRE affidavit (Form 2368) with your local assessor after closing
How much are property taxes in Michigan?
Michigan's effective property tax rate lands around 1.3% to 1.5% of market value statewide, among the higher rates in the country. But the range across communities is huge: high-millage cities like Detroit sit well above that, while many townships come in lower.
Bills arrive twice a year — a summer levy (usually July) and a winter levy (usually December). If you have an escrow account, your lender collects a slice each month and pays these for you.
Property tax is a big piece of your monthly payment, so fold it into the math early. Our affordability calculator and the closing-costs guide both account for it, and taxes factor into how much income a home really needs across Michigan cities.
Frequently asked questions
How much is property tax in Michigan?
The statewide effective rate is roughly 1.3% to 1.5% of a home's market value, but it varies widely by community because each sets its own millage. High-millage cities like Detroit run higher; many townships run lower. Your bill is your taxable value times the local millage.
What is the homestead exemption in Michigan?
It's the Principal Residence Exemption (PRE). It removes up to 18 mills of local school operating tax from the home you live in. You claim it by filing Form 2368 with your city or township, and it doesn't apply to second homes or rentals.
Why did my property tax go up after I bought the house?
Because of Proposal A. While one owner holds a home, its taxable value can only rise by the lesser of inflation or 5% a year. When the home sells, that value 'uncaps' and resets to the SEV the next year — so your bill can be higher than the seller's.
When are Michigan property taxes due?
Most communities bill twice a year: a summer levy around July and a winter levy around December. If you escrow, your lender pays them from the amount it collects with your monthly mortgage payment.