Michigan’s local taxes come in two main forms: property taxes, which every resident pays to a mix of county, city or township, and school district authorities, and a local income tax collected by 24 cities on top of the state income tax. Michigan does not allow local sales taxes, so the 6% you pay at the register is the same everywhere in the state. What varies, sometimes dramatically, is your property tax millage rate and whether the city you live or work in is one of the 24 with its own income tax.
Property Taxes
Every parcel of real and personal property in Michigan is taxable unless it qualifies for a specific exemption.1Michigan Legislature. MCL Section 211.1 Your bill is driven by three numbers.
The assessed value is set at roughly 50% of your home’s true market value. County equalization reviews adjust these figures across jurisdictions to produce the State Equalized Value (SEV).
The taxable value is what your tax is actually calculated on. Under Proposal A, passed by voters in 1994, taxable value cannot rise from one year to the next by more than 5% or the rate of inflation, whichever is lower. The cap resets when a property sells, and the new owner’s taxable value jumps to the current SEV. That is why two identical houses on the same street can carry very different tax bills.
The millage rate converts taxable value into dollars owed. One mill equals $1 of tax per $1,000 of taxable value. A home with an $80,000 taxable value in an area with 40 combined mills owes $3,200 a year. The combined rate stacks levies from the county, your township or city, the school district, the community college, and any special authorities like a library or transit system.
When Property Taxes Are Due
Michigan property taxes are billed twice a year. Summer taxes become a lien July 1 and are due September 14. Winter taxes become a lien December 1 and are due February 14. Some cities set different dates by charter, so confirm with your local treasurer.2State of Michigan. Frequently Asked Questions – Property Tax State Education Tax
Late summer payments accrue a 1% administrative fee plus 1% interest for each month unpaid. A bill paid in November already owes 104% of the original amount. Anything still unpaid on the last day of February is turned over to the county treasurer as delinquent,2State of Michigan. Frequently Asked Questions – Property Tax State Education Tax which adds a 4% administration fee and 1% interest per month going forward.3Michigan Legislature. MCL Section 211.78a – Property Returned as Delinquent Continued delinquency eventually leads to forfeiture and foreclosure.
Exemptions and Credits That Lower Your Property Tax Bill
Michigan offers several programs that can meaningfully cut what you owe. Missing a filing deadline is one of the most expensive mistakes homeowners make here.
Principal Residence Exemption
The Principal Residence Exemption (PRE) exempts your home from the local school district’s operating millage and typically saves homeowners several hundred dollars a year. You must own and occupy the property as your principal residence and file an affidavit with your local tax collecting unit by June 1 for the summer levy or November 1 for the winter levy.4Michigan Legislature. MCL Section 211.7cc – Principal Residence Exemption Once granted, the PRE stays in place as long as you own and live there. If you recently bought a home and never filed the affidavit, you’re almost certainly overpaying.
Homestead Property Tax Credit
Separate from the PRE, the Homestead Property Tax Credit is a refundable credit claimed on your state return (Form MI-1040CR) that reimburses part of your property taxes or rent. Both homeowners and renters can qualify if total household resources are $71,500 or less, and for homeowners the taxable value cannot exceed $165,400.5State of Michigan. Michigan Taxpayers Encouraged to Check Eligibility for Homestead Property Tax Credit The maximum credit is $1,900, available in full to households with resources of $62,500 or less; the credit phases out by 10% for each $1,000 above that figure.6State of Michigan. 2025 MI-1040CR-2 Homestead Property Tax Credit Claim Renters compute the credit on 23% of annual rent, treated as property taxes paid on their behalf. The average credit during the 2025 filing season was $820.
Disabled Veterans Exemption
Michigan exempts the homestead of a qualifying disabled veteran from all property taxes. The veteran must be a Michigan resident rated permanently and totally disabled by the U.S. Department of Veterans Affairs at the 100% rate, have received assistance for specially adapted housing, or have been rated individually unemployable. A surviving spouse who does not remarry may continue the exemption. Applications are filed with the local assessing officer between January 1 and December 31 of the claim year, and once granted, the exemption continues without annual reapplication.7Michigan Legislature. House Bill No. 4444 – Disabled Veterans Property Tax Exemption
Poverty Exemption
Homeowners who cannot afford property taxes due to poverty may qualify for a partial or complete exemption. The local supervisor and board of review decide, and each municipality sets its own income and asset guidelines, generally tied to multiples of the federal poverty level.8Michigan Legislature. MCL Section 211.7u – Poverty Exemption The exemption does not apply to property owned by a corporation. Contact your local assessor for the current thresholds and application form.
If You Think Your Assessment Is Too High
Start with the March Board of Review in your city or township. Every municipality must hold one each year. Hearings begin on the second Monday in March (March 9 in 2026), and the board must complete its work by the first Monday in April (April 6 in 2026).9Michigan Legislature. MCL Section 211.30 – Board of Review Meetings10Michigan Department of Treasury. 2026 Boards of Review – Bulletin 16 of 2025 You can appear in person, send an agent, or protest by letter if you’re a nonresident. Bring evidence: recent comparable sales, photographs of defects, or a professional appraisal. If the board denies your appeal, the next stop is the Michigan Tax Tribunal.
Local Income Taxes in 24 Cities
Twenty-four Michigan cities collect a local income tax in addition to the state’s flat tax. You owe it if you live in one of these cities, and if you only work in one you owe a lower nonresident rate on wages earned there.11State of Michigan. Which Cities Impose an Income Tax
Rates
Most cities charge the standard maximum: 1% for residents, 0.5% for nonresidents. Three cities charge more:
- Detroit: 2.4% resident, 1.2% nonresident12State of Michigan. 2026 City of Detroit Income Tax Withholding Guide
- Grand Rapids: 1.5% resident, 0.75% nonresident
- Highland Park: 2% resident, 1% nonresident13City of Grand Rapids. Other Michigan Cities with Income Tax
The other 21 cities all use the 1% / 0.5% split: Albion, Battle Creek, Benton Harbor, Big Rapids, East Lansing, Flint, Grayling, Hamtramck, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Saginaw, Springfield, and Walker.13City of Grand Rapids. Other Michigan Cities with Income Tax Detroit’s higher ceiling is authorized by state law for cities over 750,000 in population.14Michigan Legislature. Michigan Compiled Laws 141-503 – Excise Tax on Income, Levy
Filing
Residents of these cities owe the resident rate on all income regardless of where it is earned. Commuters into one of these cities should see the nonresident rate withheld by their employer. Either way, a city income tax return is required. The filing deadline is April 30 of the following year, not the April 15 federal date.
Special Assessments, Hotel Taxes, and Fees
Beyond property and income taxes, a few other local charges can appear on your bill. Special assessments are charges tied to a specific public improvement that benefits your parcel, such as a new sidewalk, sewer line, or paving project. They are not based on taxable value; they reflect the benefit to your property and can be spread over as many as 20 annual installments.15Michigan Legislature. MCL Section 125.985 – Principal Shopping Districts and Business Improvement Districts They show up on the property tax bill and often surprise owners who missed the public hearing when the project was approved.
Counties can impose a hotel and motel excise tax under Public Act 263 of 1974 on lodging stays of fewer than 30 consecutive days. Rates vary by county, and some counties have received separate legislative authorization to go above the original statutory rate. The revenue funds tourism and convention promotion rather than general operations.
Water, sewer, and trash charges are user fees rather than taxes, but they are a real part of what you pay your local government. You generally only pay for services you use or are connected to.
Limits on What Local Governments Can Charge
Michigan places firm constitutional and statutory limits on local taxing power, and these limits explain some of the quirks of your tax picture.
No local sales tax. Cities and counties cannot layer a sales tax on top of the state’s 6%. A share of state sales tax revenue is distributed to local governments, but no local jurisdiction adds its own percentage.16Michigan Legislature. Michigan Constitution of 1963 Article IX Section 25
The Headlee Amendment. Article IX, Section 31 of the Michigan Constitution prevents a local government from raising property tax revenue faster than inflation through assessment growth alone. When total taxable value in a jurisdiction grows faster than inflation, the millage rate is rolled back proportionally. That is why millage rates often drift down over time, and why “Headlee override” questions appear on local ballots when a government wants to restore the original authorized rate.
Voter approval. Property taxes and other local taxes cannot be raised above existing limitations without a direct vote of the people affected.16Michigan Legislature. Michigan Constitution of 1963 Article IX Section 25 New millages, renewals at higher rates, and Headlee overrides all require ballot approval.