Michigan Property Tax Uncapping: Triggers, Affidavit, and Appeals

In Michigan, property tax uncapping is what happens the year after a property changes hands: the taxable value, which Proposal A had been holding down at the rate of inflation, resets to the property’s current State Equalized Value (50 percent of market value). For a home that has been in the same hands for many years, that reset often means a substantial jump in the tax bill. The rule comes from MCL 211.27a, and it applies unless the transfer fits one of several statutory exceptions.¹

What Uncapping Actually Means

Two numbers matter on a Michigan property tax record. The State Equalized Value (SEV) is set each year at 50 percent of the assessor’s estimate of true cash value. The Taxable Value is what your tax is actually calculated on, and under Proposal A it can grow by no more than the lesser of 5 percent or the rate of inflation each year.¹ For 2026, the State Tax Commission set the inflation rate multiplier at 1.027, so taxable values on existing property can rise by no more than 2.7 percent over their 2025 levels.²

In a market where home values have grown faster than inflation, the taxable value falls further and further behind the SEV. A homeowner who bought in 2005 may have a taxable value that is a fraction of what the assessor now says the property is worth. Every year that gap grows, the tax savings grow with it.

Uncapping closes that gap in a single step. In the calendar year after a transfer of ownership, the assessor throws out the capped figure and sets the new taxable value equal to the current SEV. From that point forward, the Proposal A cap starts building again from the new baseline. The new owner keeps the reset value; there is no way to inherit the previous owner’s capped number outside the exceptions listed below.

Transfers That Trigger Uncapping

A “transfer of ownership” under MCL 211.27a is broader than a typical home sale. The most common triggers:

Deed conveyances. The standard sale is the ordinary case.
Land contracts. Signing the contract counts as the transfer, even though full legal title doesn’t pass to the buyer until the contract is paid off.
Trust beneficiary changes. When the sole present beneficiary of a trust changes to someone other than the current beneficiary’s spouse, the property uncaps.
Entity ownership shifts. Transferring more than 50 percent of the ownership interest in a corporation, LLC, partnership, or other entity that holds the property is treated as a transfer of the property itself. The deed never changes, but the taxable value uncaps just as it would on a straight sale.¹

The entity rule is the one that catches buyers off guard. Selling 51 percent of an LLC that owns a building produces the same uncapping result as recording a new deed.

Transfers That Don’t Trigger Uncapping

Michigan carves out several categories of transfer where the taxable value stays capped. The main ones, from MCL 211.27a(7) and (6):¹

Between spouses. A conveyance from one spouse to the other, or from a decedent to a surviving spouse, does not uncap.
Court-ordered transfers without a stated price. A transfer ordered by a court is exempt unless the court sets a monetary price. Most divorce property divisions qualify.
Joint tenancy adjustments. Creating or ending a joint tenancy is exempt as long as at least one of the original joint tenants from the time the joint tenancy was first created remains on title.
Family transfers of residential property. A transfer to or from a parent, child, grandchild, or sibling, including adopted children, is exempt if the property stays residential. If the new owner converts it to commercial use, the exemption is lost.
Qualified agricultural property. A farm transfer is exempt if the new owner files an affidavit with the local assessor and the county register of deeds committing to continued agricultural use. If the property is later converted, the taxable value uncaps retroactively and a recapture tax applies.

These are the categories most homeowners run into. The statute lists additional narrower exceptions, so if a specific transaction sits close to one of these lines, the exact language of MCL 211.27a is what governs.

Filing the Property Transfer Affidavit

Every transfer of ownership, including the ones that don’t uncap, triggers a filing requirement. The new owner must complete a Property Transfer Affidavit (Form 2766) and file it with the local assessor within 45 days of the transfer.³ The form asks for the property identification number, the names and addresses of buyer and seller, the purchase price, and the date the deed or land contract was signed.

Late filing penalties escalate quickly and depend on the property type:⁴

Principal residence: $5 per day, up to $200.
Other non-commercial, non-industrial property: $5 per day, up to $4,000.
Commercial or industrial property with a sale price of $100 million or less: $20 per day, up to $1,000.
Commercial or industrial property with a sale price over $100 million: a flat $20,000 penalty once the 45-day window closes.

Not filing does not prevent uncapping. Assessors learn about transfers through recorded deeds, land contract recordings, and other public records, so skipping the affidavit only adds a penalty on top of whatever tax bill the uncapping already produces.

If You Believe the Uncapped Value Is Wrong

The tax bill that arrives after an uncapping event is often the moment owners look closely at what the assessor thinks their property is worth. The first step in challenging that number is the local Board of Review, which meets in March. In 2026, sessions begin the week of Monday, March 9, with boards required to hold at least 12 hours of meetings that week.⁵⁶ Bring evidence: a recent appraisal, comparable sales, or documentation of defects that reduce value.

If the Board of Review denies the protest, the next step is the Michigan Tax Tribunal. Protesting at the Board of Review first is generally required before the Tribunal will take jurisdiction.⁷ Residential and agricultural owners can use the Small Claims Division, which is less formal; other property types use the Entire Tribunal. Residential small claims petitions are typically due by July 31 of the tax year, and commercial and industrial cases follow an earlier deadline.

One point worth understanding before you appeal: the Tribunal reviews the assessed value and SEV against actual market evidence. It doesn’t reverse an uncapping event itself, only the market value that the reset was based on. If the transfer legally triggered uncapping, the taxable value will still be pushed to whatever SEV the evidence supports.

1
Michigan Legislature. Michigan Compiled Laws 211.27a
2
Michigan State Tax Commission. Bulletin 14 of 2025 – Inflation Rate Multiplier for 2026
3
State of Michigan. 2766 Property Transfer Affidavit
4
Michigan Legislature. Michigan Compiled Laws 211.27b
5
Michigan Department of Treasury. 2026 Boards of Review
6
Michigan Legislature. Michigan Compiled Laws 211.30
7
Michigan Legislature. Michigan Compiled Laws 205.735