Michigan Property Taxes Explained: Millage, Exemptions, and Appeals

Michigan property taxes are calculated by multiplying your property’s taxable value by the combined millage rate levied by your county, city or township, school district, and any other local authorities. Taxable value is not the same as market value, and the gap between the two is where most of the savings and surprises in the system live. If the home is your primary residence, filing a single affidavit removes up to 18 mills of school operating tax, which on a home with a $100,000 taxable value is $1,800 a year.¹

How Your Tax Bill Is Calculated

Every property in Michigan is assessed each year at 50% of its true cash value, meaning what it would likely sell for on the open market. That number is called the State Equalized Value, or SEV.² Your local assessor sets it based on recent sales, the size and condition of the property, and its location.

The number that actually drives your bill is your taxable value, which appears alongside the SEV on the annual assessment notice you receive. Review that notice when it arrives. Wrong square footage, a bathroom that doesn’t exist, or unrecorded damage all inflate what you owe.

Once you know your taxable value, the math is straightforward. One mill equals $1 of tax per $1,000 of taxable value. A combined rate of 40 mills on a taxable value of $100,000 produces a $4,000 bill for the year. Your total rate is the sum of every millage levied by every authority that covers your parcel: county, municipality, school district, community college, library, and sometimes special authorities. The breakdown is printed on your tax bill.

Voters approve local millage through ballot proposals. Under the Headlee Amendment, ratified in 1978, existing millage cannot generate revenue that grows faster than inflation; when rising values would push collections past that limit, the rate rolls back automatically.³ Local governments can ask voters to restore rolled-back millage or approve new millage, but they can’t raise rates on their own.

Special assessments are separate. If you see a line item for sidewalks, a sewer upgrade, or street lighting, that charge is based on the specific benefit to your property rather than on taxable value, and it follows different rules from ordinary millage.⁴

Why Taxable Value Is Usually Less Than Market Value

Under Proposal A, a constitutional amendment voters approved in 1994, your property’s taxable value cannot rise by more than the Consumer Price Index or 5%, whichever is lower, no matter how much market value jumps.⁵ If your home’s market value climbs 15% in a hot year, your taxable value still rises only by the capped amount. Taxable value is always the lower of the SEV or the capped value.

The cap resets when ownership changes. In the year after a sale, taxable value snaps up to the full SEV.⁵ If the previous owner held the property for years while the cap held the taxable value well below market, the new buyer inherits a noticeably larger bill. Before closing, check both numbers.

Transfers That Don’t Uncap the Property

Not every change of hands resets the cap. Transfers between spouses, including those caused by a death, do not uncap. Creating or dissolving a tenancy by the entireties between spouses is also protected.⁶

Since the end of 2014, certain transfers of residential property to close family members also avoid uncapping. If a parent held a life estate and it terminates in favor of that person’s or their spouse’s parent, sibling, child, adopted child, or grandchild, the taxable value stays capped as long as the property isn’t used for commercial purposes afterward. Similar protections cover transfers into and out of trusts where the beneficiaries are the settlor, the settlor’s spouse, or those same close relatives.⁶ Estate planning around these exceptions can save families thousands of dollars.

What New Construction Does

Additions to your property are treated separately from the cap. When you build a room, add a garage, or make other physical improvements, 50% of the true cash value of the new work is added to your taxable value as an “addition.”⁷ Only genuinely new construction counts. Replacing a worn-out roof with a similar one is maintenance, not an addition.

Exemptions That Reduce Your Bill

Filing deadlines are strict. Missing one usually means waiting a full year for relief.

Principal Residence Exemption

The Principal Residence Exemption removes up to 18 mills of local school operating tax from your primary home.¹ You must own and occupy the property as your primary residence and file Form 2368 with your local tax collecting unit.

File by June 1 for the summer bill or by November 1 for the winter bill. If you move in mid-year and miss June, filing before November 1 still gets you the winter exemption. Active-duty military use Form 4660 with a May 1 deadline.⁸ Once filed, the exemption stays in place until you move out or stop using the home as your primary residence. You don’t refile each year.

Disabled Veterans Exemption

Veterans rated 100% permanently and totally disabled by the U.S. Department of Veterans Affairs due to military service receive a complete property tax exemption on their homestead. The exemption also extends to surviving spouses.⁹ Unlike the PRE, which only removes school operating mills, this wipes out the entire tax bill on the home.

Qualified Agricultural Property

Farmland classified as agricultural on the roll is automatically exempt from local school operating taxes with no paperwork. If your farmland is not classified as agricultural, you can still claim the exemption by filing an affidavit with the local tax collecting unit by May 1.¹⁰ The exemption covers the land and agricultural structures and, like the PRE, removes only the school operating millage.

Qualified Forest Program

Owners of forested land can enroll in the Qualified Forest Program to exempt the land from local school operating taxes. Enrollment requires a forest management plan prepared by a qualified forester, an application to the Michigan Department of Natural Resources with a $50 fee by September 1 before the tax year, and a recorded affidavit filed with your local tax collecting unit and assessor by December 31.¹¹

Enrolled parcels pay 2 mills on their taxable value in place of the school operating tax. If you withdraw the land from the program, you must notify the department within 90 days or face a penalty of $5 per day up to $1,000. Buildings and structures don’t qualify; only the land does.¹¹

Small Business Personal Property

Businesses with modest equipment, furniture, and fixtures can avoid personal property tax entirely. If the combined true cash value of all your commercial or industrial personal property in a single local tax collecting unit is under $180,000, you may qualify for the Small Business Taxpayer Exemption.¹²

There are two tiers. If true cash value is under $80,000, you file Form 5076 with your local unit once by February 20 and don’t refile unless circumstances change. If value is between $80,000 and $180,000, you file Form 5076 with a Personal Property Statement (Form 632) every year by February 20. Late filers can still bring the paperwork to the March Board of Review before it closes.¹² The form goes to your local city or township assessor, not the state.

Poverty Exemption and Homestead Credit

Homeowners who meet locally set income and asset guidelines can apply for a poverty exemption through their local Board of Review. Each city and township sets its own thresholds. You generally apply during the March Board of Review session with proof of income and assets.

Separately, Michigan’s Homestead Property Tax Credit is a refundable credit on your state income tax return that offsets a portion of property taxes exceeding a set percentage of household income. You claim it when filing your Michigan income tax return, not through your local assessor. Renters can claim a version of the credit based on the portion of their rent attributed to property taxes.

When Payments Are Due

Michigan splits your bill into two installments. The summer bill, which typically includes state education taxes and county allocated mills, is due by September 14. The winter bill, covering the remaining local millage, is due by February 14.¹³ Some cities set different dates in their charters. Detroit, for example, uses August 15 and January 15 for its summer installments and January 15 for the winter bill. Check the dates printed on your actual bill.

Most local treasurers accept payment online, by mail, or in person, and some offer automatic payment plans or drop boxes. For mailed payments, what usually matters is when the treasurer receives it, not the postmark, unless local policy says otherwise. If a mortgage company pays from escrow, confirming that the payment cleared is still your responsibility.

What Happens If You Don’t Pay

Missing a property tax deadline in Michigan starts a clock that can end in losing the home. The timeline stretches over roughly three years, but it moves on a rigid schedule with little room to negotiate once it’s underway.

Year One: Delinquency

Taxes unpaid by the local deadline are returned to the county treasurer as delinquent on March 1 of the following year. A 4% administration fee is added along with noncompounded interest at 1% per month.¹⁴ The county treasurer sends notices by first-class mail in June and September, and adds a $15 fee in October. By November, the county compiles a list of properties subject to forfeiture.

Year Two: Forfeiture

If the taxes remain unpaid, the county treasurer sends a certified-mail notice in February. On March 1, the property formally forfeits to the county treasurer and a $175 title search fee is added.¹⁴ Interest continues to accrue at half a percent per month from the original delinquency date.¹⁵ The foreclosing governmental unit orders a title search and visits the property. By mid-June, a petition for foreclosure is filed with the circuit court.

Year Three: Foreclosure

Between late January and February, the circuit court holds a judicial foreclosure hearing, with the judgment deadline on March 30. You can redeem the property at any point up to March 31 by paying all delinquent taxes, interest, penalties, and fees in full.¹⁵ After March 31, absolute title transfers to the foreclosing governmental unit and all prior liens and ownership interests are wiped out.¹⁴

The property is then offered at public auction, with at least two rounds held between July and November. Anything unsold transfers to the local city, village, or township by the end of December. Paying early in the process saves hundreds of dollars in fees and interest. Miss the final March 31 redemption date and the property is gone.

How to Challenge Your Assessment

If you think your property is over-assessed, Michigan provides a structured appeal path. You have to start locally.

Board of Review

Every city and township holds Board of Review meetings starting the second Monday in March. The board meets for at least 12 hours during that week to hear protests from property owners.¹⁶ You can appear in person or send an agent. Bring comparable sales data, photos of property condition, or a recent appraisal. If you show sufficient cause, the board must adjust the value.

This step is not optional. For most residential property owners, you must protest to the Board of Review before you can appeal further. The window is short, and missing it generally locks you in for the year.

Michigan Tax Tribunal

If the Board of Review doesn’t resolve the dispute, you can appeal to the Michigan Tax Tribunal, a specialized body that handles property tax cases across the state.¹⁶ The tribunal accepts written petitions and can schedule in-person hearings. Bring an independent appraisal, evidence of comparable property assessments, or records showing errors in the property description. The Small Claims Division handles residential properties with lower complexity; the Entire Tribunal hears larger or more complex cases.

Court of Appeals

Tribunal decisions can be appealed to the Michigan Court of Appeals, though this is uncommon for typical homeowner disputes. At that stage, the court reviews whether the tribunal applied the law correctly rather than re-evaluating the property’s value. Legal representation becomes practically necessary. For most homeowners, the Board of Review and Tax Tribunal are enough to correct an incorrect assessment.

1
State of Michigan. Principal Residence Exemption
2
City of Traverse City. General Property Tax Act
3
Michigan Legislature. Recovery of Fees and Costs – The Headlee Amendment
4
Michigan Legislature. MCL 141-904 – Glenn Steil State Revenue Sharing Act of 1971
5
davisontwp-mi.gov. PROPOSAL A Taxable Value
6
Michigan Legislature. MCL 211-27a – The General Property Tax Act
7
Michigan Legislature. MCL 211-34d – The General Property Tax Act
8
Michigan Legislature. Taxpayers Guide
9
Michigan Legislature. MCL 211-7b – The General Property Tax Act
10
Michigan Legislature. MCL 211-7ee – The General Property Tax Act
11
Michigan Legislature. MCL 211-7jj – The General Property Tax Act
12
State of Michigan. Small Business Property Tax Exemption Claim Under MCL 211-9o
13
State of Michigan. Frequently Asked Questions – Property Tax – Section: Summer Property Tax Schedule and Payment Information
14
State of Michigan. Real Property Tax Foreclosure Timeline
15
Michigan Legislature. MCL 211-78g – The General Property Tax Act
16
Michigan Legislature. MCL 211-30 – The General Property Tax Act