The most effective ways to lower property taxes in Michigan are to claim every exemption your property and household qualify for, appeal your assessment when the numbers don’t match reality, and use the income-based credits and deferments the state offers. The Principal Residence Exemption alone removes up to 18 mills of local school operating tax from a primary home, and layered strategies can save homeowners thousands more each year. What follows walks through each option, the deadline attached to it, and who qualifies.
Claim the Principal Residence Exemption
If you own and occupy a home as your primary residence, filing a Principal Residence Exemption affidavit with your local tax collecting unit removes up to 18 mills of local school operating tax from your bill.1State of Michigan. Principal Residence Exemption Background On a home with a taxable value of $150,000, that’s roughly $2,700 a year. File by June 1 to catch the summer levy, or by November 1 for the winter levy.2Michigan Legislature. Michigan Code 211.7cc – Principal Residence Exemption
You can only hold one PRE at a time. If you move and keep the old house, rescind the exemption on the property you no longer live in. Claiming it on a place that isn’t truly your primary residence triggers back taxes for every year it was improperly claimed, plus interest of 1.25% per month from the original due date.3State of Michigan. Taxes and Interest Owed as a Result of a Principal Residence Exemption Denial Treasury can waive the interest if the denial resulted from an assessor error, but that’s the exception.
Appeal Your Assessment
If your assessed value looks too high, Michigan gives you two levels of appeal. Both have hard deadlines, and both reward evidence over argument.
Start at the Board of Review
Every township and city convenes a Board of Review during the week of the first Monday in March. The board is required to meet at least 12 hours during the week of the second Monday in March to hear protests, with at least three of those hours after 6 p.m. so working residents can attend.4Michigan Legislature. Michigan Code Act 206 of 1893 – Board of Review You or your representative can appear, explain why the value is wrong, and hand over supporting proof.
What works: recent comparable sales in your neighborhood showing lower values per square foot than your assessment implies; a professional appraisal complying with the Uniform Standards of Professional Appraisal Practice, prepared by a licensed appraiser (not a Realtor’s market analysis); and photos of deferred maintenance, structural issues, or neighborhood conditions that would reduce market value. Residential appraisals typically run $200 to $500.
Escalate to the Michigan Tax Tribunal
If the Board of Review doesn’t fix the problem, appeal to the Michigan Tax Tribunal. The filing deadline is June 30 of the tax year at issue.5Michigan Legislature. Michigan Code 205.735 – Tax Tribunal Act, Jurisdiction and Filing Miss it by a day and you lose the year. Homeowner cases go to the Residential Property and Small Claims Division, which has simpler procedures and no filing fee for principal residences.6Michigan Legislature. Michigan Code 205.749 – Tax Tribunal Act, Fees The standard is preponderance of the evidence, meaning the more convincing case wins, and many disputes settle before a formal hearing.
If the Tribunal still rules against you, you can appeal to the Michigan Court of Appeals.7Michigan Legislature. Michigan Code 205.753 – Tax Tribunal Act, Appeals That court reviews legal reasoning rather than reweighing facts, so the evidence you build at the Tribunal is what carries the case.
Check Your Property Classification
Michigan assesses different property classes using different methods. A parcel misclassified as commercial when it should be residential, or listed as improved after significant structures were demolished, can inflate your bill for years. Look at the classification on your assessment roll. If it’s wrong, raise it with the assessor or the Board of Review; a correction can lower your taxable value immediately.
Homestead Property Tax Credit
The Homestead Property Tax Credit is a state income tax credit rather than a direct reduction on your property tax bill, but it puts real money back when property taxes eat a disproportionate share of your income. Both homeowners and renters can claim it. During the 2025 filing season, nearly 1.1 million Michigan residents received the credit, with an average payout of $820.8Michigan Department of Treasury. Michigan Taxpayers Encouraged to Check Eligibility for Homestead Property Tax Credit
You must meet all of these:
- You lived in Michigan for at least six months during the tax year.
- Your total household resources are $71,500 or less.
- For homeowners, your home’s taxable value is $165,400 or less, unless the property is unoccupied farmland.
- You own or rent a Michigan homestead on which property taxes were levied.
The credit is calculated by comparing property taxes paid (or a percentage of rent for renters) against total household resources. Claim it on your Michigan income tax return; the credit can reduce your tax below zero and result in a refund.9State of Michigan. Homestead Property Tax Credit
Poverty Exemption
Every local assessing unit in Michigan must offer a poverty exemption that partially or fully eliminates property taxes on a principal residence. The baseline eligibility threshold is the federal poverty guidelines published in the prior calendar year, and local governments can set more generous limits.10Michigan Legislature. Michigan Code 211.7u – Principal Residence of Persons in Poverty, Exemption
Apply through your local Board of Review, typically during its March session. You’ll generally need federal and state tax returns, proof of homeownership, and income documentation for everyone in the household. Because standards vary by municipality, call your local assessor’s office before the deadline to confirm the specific paperwork.
Summer Tax Deferment
Certain homeowners can delay paying the summer property tax levy until February 15 of the following year, with no penalty or interest. The property must be your principal residence, and your prior-year total household income must be $40,000 or less.11Michigan Legislature. Michigan Code 211.51 – Summer Property Tax Deferment You also must fall into one of these categories:
- Age 62 or older, including the unremarried surviving spouse of someone who was 62 or older at death.
- Totally and permanently disabled.
- Paraplegic, quadriplegic, or blind.
- Eligible veteran, service member, or surviving spouse.
The deferment shifts timing rather than reducing the amount owed. File the claim with your city or township treasurer before the summer tax due date.
Disabled Veteran Exemption
Michigan fully exempts the homestead of a qualifying disabled veteran from all property taxes, not just the school operating mills. The exemption covers the home and the land, with no income or asset test. A surviving spouse who does not remarry continues to qualify, including on a new homestead purchased after the veteran’s death.12Michigan Legislature. Michigan Code 211.7b – Disabled Veteran Homestead Exemption
You qualify as a disabled veteran under any of three criteria: the VA has rated you permanently and totally disabled at the 100% rate due to military service, the VA has certified you for specially adapted housing assistance, or the VA has rated you individually unemployable. That third category is the one veterans most often overlook. Individual unemployability qualifies you for a complete exemption even if your combined disability rating is technically below 100%.
Farmland Preservation Credit
The Farmland and Open Space Preservation Program, originally enacted as PA 116, gives agricultural landowners a Michigan income tax credit in exchange for keeping their property in agricultural use for at least ten years.13Michigan Department of Agriculture and Rural Development. Farmland and Open Space Preservation Frequently Asked Questions The credit equals the property taxes on the enrolled land and improvements minus 3.5% of your total household income. It stacks on top of the Homestead Property Tax Credit.
Enrolled farmland is also exempt from special assessments for sewer, water, lighting, and non-farm drainage projects, unless those assessments were in place before enrollment. Terminate the agreement early and you’ll owe back the benefits you received, so the commitment should match your long-term plans.14Michigan Department of Agriculture and Rural Development. Farmland Preservation
Business Property Options
If your business owns or leases industrial or commercial personal property with a combined true cash value under $80,000 within a single local tax collecting unit, that property is fully exempt from personal property tax. This covers equipment, furniture, fixtures, and other tangible business assets, and it applies once you file the appropriate form with your local assessor.15State of Michigan. Personal Property Tax Exemptions
For larger investments, an Industrial Facilities Exemption Certificate under Act 198 of 1974 replaces the standard ad valorem property tax with a lower specific tax, typically for up to 12 years. The law covers both replacement facilities that restore or update obsolete industrial property and new facilities built within designated districts. Applications go to the local legislative body first, then to the State Tax Commission for final approval.16Michigan Legislature. Michigan Code Act 198 of 1974 – Plant Rehabilitation and Industrial Development Districts
Watch the Uncapping Trap When Property Changes Hands
Proposal A caps how fast your taxable value can grow: each year it can increase by the lesser of 5% or the rate of inflation. When a property transfers ownership, that cap resets and the taxable value uncaps to the state equalized value. A home that cost the previous owner $2,400 a year can easily cost the buyer $4,000 or more purely because the cap was removed.
Not every transfer triggers uncapping. Michigan law preserves the cap for transfers between spouses, transfers into a trust where the original owner remains the sole beneficiary, and transfers from a deceased owner to a surviving spouse, among others.17Michigan Legislature. Michigan Code 211.27a – Taxable Value Adjustments and Transfer of Ownership If you’re moving property to a family member or into a trust, confirm whether the transfer uncaps before signing anything; the tax difference can outlast the paperwork by decades. New owners must also file a Property Transfer Affidavit with the local assessor within 45 days of a transfer, or face daily penalties.18State of Michigan Department of Treasury. Property Transfer Affidavit Form 2766
If You’re Already Behind
Michigan law lets local tax collecting units grant deferments to property owners who meet strict eligibility requirements. A valid deferment lets you pay at a later date without additional penalty and interest, as long as you meet the extended deadline.19State of Michigan. Deferment of Property Taxes Once taxes are returned as delinquent on March 1, a 4% administration fee and 1% monthly interest attach, and the foreclosure clock starts running.20State of Michigan. Foreclosure Process Timelines Contact your township or city treasurer before that point; the earlier you raise the problem, the more options remain on the table.