Michigan property tax after you buy

Why your bill can differ from the seller's

Michigan's Proposal A limits how fast a home's taxable value can grow while one owner holds it: by the lesser of 5% or inflation each year. Over a long ownership the taxable value can fall far below the home's State Equalized Value (SEV), which the assessor sets at about 50% of market value.

When the home sells, the cap comes off in the following tax year and the taxable value resets to the SEV. The new owner's first full-year bill is the SEV times the millage rate, no matter how low the seller's capped bill was. Example: a $300,000 purchase has an SEV of about $150,000, so each 10 mills of tax adds about $1,500 a year.

The Principal Residence Exemption (homestead) removes up to 18 mills of school operating tax from a home you live in. A second home or a rental does not get it, so the same house carries a higher bill as a rental. You must file the homestead exemption affidavit (Michigan Form 2368) with the local assessor; until it is filed, the higher non-homestead rate applies. Use the calculator to see both numbers.

Comparing places? See property tax rates by city and township in West Michigan, or run the numbers for an investment with the rental property calculator.

Assumptions

• SEV is 50% of the purchase price. The assessor sets the actual SEV, and it can differ from half of what you paid.
• Taxable value equals SEV in the first full tax year after the sale. The purchase year itself usually still carries the seller's capped value.
• Millage for a picked place is the certified total millage for 2025 from the Michigan Department of Treasury report “2025 Total Property Tax Rates in Michigan”, for the school district you choose. It is the real certified rate, not a modeled one. Rates change every year. When you enter millage by hand, the homestead rate is your total minus the mills you say the exemption removes.
• Not included: special assessments, drain or water charges, summer or winter tax timing, and future millage changes. Taxable value in later years can rise by the lesser of 5% or inflation.

These are estimates for planning only, not a tax bill or tax advice. Confirm the assessed value, millage and exemption status with the local assessor or treasurer, and talk with a tax professional about your situation.