Bay City property tax runs about 34.28 mills on a primary residence and 52.28 mills on non-homestead parcels in the Bay City School District as of 2025, which works out to roughly $1,714 a year on a home with a Taxable Value of $50,000 if you have the Principal Residence Exemption, or about $2,614 without it.1State of Michigan. Total Property Tax Rates in Michigan 2025 Bills come in two pieces each year, and several exemptions can shrink what you owe if you file for them.
How Your Bill Is Calculated
Every parcel carries three numbers: Assessed Value, State Equalized Value (SEV), and Taxable Value. The City Assessor estimates market value based on the property’s condition as of December 31 of the prior year, a date Michigan law calls Tax Day.2Michigan Legislature. Michigan Compiled Laws 211.2 – Real Property; Definition; Determination of Taxable Status SEV is set at roughly 50 percent of true cash value and cannot legally exceed that ceiling.3Michigan Legislature. Michigan Compiled Laws 205.737 – Tax Tribunal Act
Your bill, though, is calculated against Taxable Value, not SEV. Under Proposal A, passed by Michigan voters in 1994, Taxable Value can only rise each year by the rate of inflation or 5 percent, whichever is lower, for as long as you own the property.4Michigan Legislature. Michigan Compiled Laws 211.27a – Adjusted Taxable Value In a rising market, a gap opens between Taxable Value and SEV, and that gap is a real benefit of staying put.
A mill equals one dollar of tax per $1,000 of Taxable Value. Multiply your Taxable Value by the applicable millage rate, divide by 1,000, and that is your annual tax. The roughly 18-mill difference between the homestead and non-homestead rates is almost entirely the local school operating tax that the Principal Residence Exemption removes.
What Changes When You Buy or Improve the Property
When property changes hands, the Proposal A cap disappears. In the year after a sale, Taxable Value resets to equal SEV, which reflects 50 percent of current market value.4Michigan Legislature. Michigan Compiled Laws 211.27a – Adjusted Taxable Value If the prior owner held the home for many years while values climbed, this uncapping can produce a sharp jump in your first full tax bill. When you’re estimating future taxes on a home you want to buy, look at the SEV, not the seller’s Taxable Value.
Not every transfer triggers uncapping. Transfers between spouses, transfers creating or dissolving a tenancy by the entireties, and certain transfers to close family members are exempt. For residential property passed to a parent, child, grandchild, or sibling, Taxable Value stays capped as long as the home is not used commercially afterward.4Michigan Legislature. Michigan Compiled Laws 211.27a – Adjusted Taxable Value
Whether the cap resets or not, the new owner must file a Property Transfer Affidavit with the local assessor within 45 days of the transfer, even when no deed is recorded.5Michigan Department of Treasury. Property Transfer Affidavit For family transfers claiming an uncapping exemption, failing to provide proof of eligibility within 30 days of a request from the assessor or the Department of Treasury results in a $200 fine.
Physical improvements affect your Taxable Value right away, even with the Proposal A cap in place. The new construction is assessed at 50 percent of its true cash value and added on top of your existing capped Taxable Value. The original portion of the home stays capped; the addition gets tacked on at full assessed value. Routine maintenance and cosmetic work like painting or replacing a roof generally do not trigger an increase.
Exemptions and Programs That Lower What You Owe
Principal Residence Exemption
The Principal Residence Exemption (PRE) is the single most valuable tax break for a Bay City homeowner. It exempts your primary home from up to 18 mills of local school operating taxes, which accounts for most of the gap between the homestead and non-homestead rates.6State of Michigan. Principal Residence Exemption You need to own and occupy the property as your primary residence and file a Principal Residence Exemption Affidavit with the Bay City Assessor’s Office. A Michigan driver’s license showing the property address serves as standard proof of occupancy.
The exemption is not automatic. If you recently bought your home or moved and have not filed the affidavit, you are paying the full non-homestead rate.
Poverty Exemption
Homeowners who cannot afford their property taxes may qualify for a partial or complete exemption. You must own and occupy the home as your principal residence, meet federal poverty guidelines (or alternative local guidelines adopted by Bay City, which cannot be more restrictive than the federal standards), and file an application with the Board of Review each year.7Michigan Legislature. Michigan Compiled Laws 211.7u – Principal Residence of Persons in Poverty; Exemption From Taxation The application window opens January 1 and closes before the Board of Review’s final session.
Disabled Veterans Exemption
Veterans with a permanent and total disability rating from the U.S. Department of Veterans Affairs qualify for a complete property tax exemption on their homestead. Surviving spouses of qualifying veterans are also eligible. File an application with the local assessor along with documentation of your VA benefits rating.8Michigan Legislature. Michigan Compiled Laws 211.7b – Exemption of Real Property Used and Owned as Homestead by Disabled Veteran or Surviving Spouse Applications can be submitted anytime between January 1 and December 31 of the year you are claiming.
Summer Tax Deferment
If you are 62 or older, a disabled veteran, or totally and permanently disabled, and your household income was $40,000 or less in the prior year, you can defer the summer tax payment to the winter deadline of February 14.9Michigan Department of Treasury. Application for Deferment of Summer Taxes It does not reduce what you owe, but it buys months of breathing room. File with the city treasurer before September 15 or before your summer taxes are due, whichever comes later. Payment must be received by February 14 to avoid penalties.
Michigan Homestead Property Tax Credit
Many Bay City homeowners miss this one because it is claimed on your state income tax return, not through the Assessor’s Office. The credit refunds a portion of your property taxes when they are high relative to your income. For 2026, you may qualify if your total household resources are $71,500 or less and your home’s taxable value does not exceed $165,400.10State of Michigan. Michigan Taxpayers Encouraged to Check Eligibility for Homestead Property Tax Credit The average credit was $820 in the 2025 filing season. You can file for it even if you owe no state income tax. Renters can claim it too, since a percentage of rent is treated as property tax paid.
When Bills Arrive and What Late Costs You
Bay City uses a split billing cycle. Summer tax bills are mailed July 1 and cover most city operating millages and local school taxes. Winter tax bills go out December 1 and include county millages and special assessments.11Bay City Michigan. Frequently Asked Questions – Treasurer You can pay online through the city’s website, by mail to the City Treasurer, or in person at City Hall. Online payments may carry a convenience fee.
Penalties escalate in stages:
- Summer taxes are due July 1 through September 14 with no interest. Starting September 15, a 1% fee is added, plus another 1% on the first of each month after that. On February 15, an additional 3% penalty is added.
- Winter taxes are due December 1 through February 14 with no interest. On February 15, a 3% penalty is added.
Unpaid taxes are turned over to the Bay County Treasurer on March 1 as delinquent.12Bay City, MI. Tax Bill Online Payments At that point you owe an additional 4% administration fee and 1% monthly interest on the balance.13Michigan Legislature. Michigan Compiled Laws 211.44 – The General Property Tax Act Michigan follows a three-year forfeiture and foreclosure process after that, and the home can be lost by March 31 of the third year of delinquency.14State of Michigan. Property Tax Forfeiture and Foreclosure If you are falling behind, the poverty exemption and summer deferment are worth exploring before things reach the county.
If you have a mortgage, your lender likely collects taxes monthly through an escrow account and pays the city directly. Review both your escrow statements and your actual tax bills each year. Lenders occasionally underfund escrow or miss a deadline, and you are ultimately responsible for any shortfall or late penalty.
Appealing an Assessment You Think Is Wrong
The City Assessor mails a Notice of Assessment in late February showing the proposed Assessed Value, SEV, and Taxable Value for the coming tax year. If the valuation looks wrong, your first step is the March Board of Review. For residential property, this is a required step before you can take the dispute further.15Michigan Department of Treasury. Petition to Board of Review
Complete the Petition to Board of Review (Treasury Form 618, also called L-4035) and submit it to the Board. Bring supporting evidence: a recent appraisal, comparable sales data for similar homes nearby, or photographs showing property damage or condition issues that affect value. The Board reviews your evidence and issues a written decision.
If the Board does not give you the result you want, residential property owners can appeal to the Michigan Tax Tribunal’s Small Claims Division. The deadline for that petition is June 30 of the tax year in dispute.16Michigan Legislature. Michigan Compiled Laws 205.735 – Tax Tribunal Act The Tribunal is independent of both the local assessor and the state treasury, so you get a fresh review.17Michigan Tax Tribunal. Michigan Tax Tribunal A professional appraisal strengthens your case at either level, and residential appraisals typically run $300 to $1,200 depending on complexity.