Property Taxes in Michigan
Michigan's property taxes are governed by Proposal A (1994) -- a real, distinct mechanic, a cousin of California's Proposition 13 and Oregon's Measure 50, that produces a genuine, disclosed gap between what a long-time owner and a fresh buyer of an identical home actually pay, and this record does not let one figure stand in for the other.
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Learn moreThe Proposal A mechanic, precisely
Since 1994, every Michigan property carries two separate figures: its State Equalized Value (SEV), reassessed annually without a cap and intended to track roughly 50% of true market value, and its TAXABLE value, which is what property tax is actually levied on and can rise at most the LESSER of 5% per year or the state inflation rate -- 2.7% specifically for the 2026 assessment year, since inflation ran below the 5% ceiling. At sale or transfer, taxable value uncaps and resets to match the current SEV, an effect commonly called the 'pop-up tax.'
Why a long-time owner's bill and a buyer's real bill can diverge sharply
Because taxable value grows slowly and predictably while SEV/market value can rise faster, a long-tenured Michigan owner's tax bill can sit meaningfully below what the identical property would generate for a fresh buyer -- the same fundamental dynamic this project has documented in California (Proposition 13) and Oregon (Measure 50), even though Michigan's specific two-figure (SEV plus capped taxable value) mechanism is structurally different from either.
What this means if you're buying
Do not budget against the current owner's existing tax bill -- budget against the property's post-sale, uncapped taxable value (which will match the current SEV) multiplied by your target municipality's current millage rate. Confirm both figures directly with the local assessor before finalizing an offer; this is genuinely the single most important Michigan property-tax fact for a prospective buyer.
What this means if you're staying long-term
The flip side of Proposal A is a real, genuine long-term benefit: once you buy, your taxable value (and therefore your property tax bill, aside from local millage-rate changes) grows slowly and predictably, capped at the lesser of 5%/year or inflation, regardless of how much your home's market value appreciates -- a meaningful, disclosed advantage for long-term Michigan homeowners specifically.
Key takeaways
- Proposal A caps a property's TAXABLE value growth at the lesser of 5%/year or inflation (2.7% for 2026) while its separate, uncapped State Equalized Value tracks roughly 50% of market value -- taxable value uncaps to match SEV at sale.
- Michigan's statewide average effective property tax rate runs roughly 1.19%-1.54% depending on source -- near or above the national median.
- Budget against a property's post-sale, uncapped taxable value and your target municipality's current millage rate if you are buying, not the seller's existing bill.
- Long-term owners get a real, genuine benefit: slow, predictable, capped tax-bill growth regardless of market appreciation -- the tradeoff runs the opposite direction for a fresh buyer.
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