Michigan property tax: how it works and the 18-mill exemption

How is a Michigan property tax bill calculated?

Three numbers matter, and the law defines each.

• Assessed value (also called state equalized value, or SEV) is 50% of the property’s true cash value (MCL 211.27a(1)). Status is fixed on December 31 of the year before, the “tax day” (MCL 211.2(2)).
• Taxable value is what the tax is actually applied to. It is the lesser of the prior year’s taxable value times the lesser of 1.05 or the inflation rate, plus additions, or the current assessed value (MCL 211.27a(2)).
• Millage is the rate. One mill is $1 of tax per $1,000 of taxable value.

The formula is taxable value ÷ 1,000 × total mills. The State Tax Commission set the 2026 inflation rate multiplier at 1.027, and local units may not use another number. So a home with a $40,000 taxable value can be taxed on at most $41,080 in 2026, plus the value of any additions, unless the assessed value is lower.

What happens to taxable value when you buy?

The cap ends at a sale. After a “transfer of ownership,” the taxable value for the following calendar year resets to the property’s assessed value (MCL 211.27a(3)). Then the cap applies again (MCL 211.27a(4)).

This is why a buyer’s first full bill can be higher than the seller’s. The city assessor’s FAQ describes the same rule: after a sale, taxable value “uncaps” the year after the transfer. The buyer must also tell the local assessor about the transfer within 45 days, on the State Tax Commission’s form (MCL 211.27a(10)).

What is the principal residence exemption?

A principal residence is exempt from the school operating tax levied by the local school district, up to the amount set by the Revised School Code (MCL 211.7cc(1)). The Detroit Treasury describes it as an exemption of 18 mills. Wayne County’s 2024 table agrees: Detroit’s rate is 67.2737 mills for a principal residence and 85.2737 mills for other property, a gap of exactly 18.

Key rules from MCL 211.7cc:

• You claim it by filing an affidavit with the local tax collecting unit, on the state’s form. The deadline is June 1 for the next summer levy and November 1 for the next winter levy (211.7cc(2)).
• You may not claim a similar exemption or credit in another state, and a married couple filing jointly gets one exemption (211.7cc(3)).
• It ends on December 31 of the year the home is transferred (211.7cc(4)). A buyer must file a new affidavit; the seller’s exemption does not pass to you.

Example: a home in Detroit

This example uses Wayne County’s 2024 rates, the most recent published table I could read. Later years may differ. It assumes a home with true cash value of $120,000, so an assessed value of $60,000, and a taxable value that equals it after a sale.

The 18-mill exemption saves $60 × 18 = $1,080 a year here. The county’s table gives the total for all levies in the Detroit school district. Your own bill can differ with the exact taxing units and any special assessments.

When are Michigan property taxes due?

Michigan bills a summer and a winter installment.

Unpaid summer taxes are returned as delinquent on March 1 (MCL 211.44a(5)). After the deadline, interest of 1% per month is added (MCL 211.44). Detroit’s Treasury offers a summer installment option, with a first payment due August 15; check its page for the current schedule.

How do I appeal an assessment in Detroit?

Detroit lists three steps:

1. Assessor review (optional). In 2026 it ran from February 1 to 22.
2. March Board of Review (required). The board meets starting the second Monday in March (MCL 211.30).
3. Michigan Tax Tribunal. For residential property the petition is due July 31 of the tax year (MCL 205.735a).

The Board of Review also hears applications for the poverty exemption (MCL 211.7u), which reduces taxable value by 25% to 100% for owners who meet federal poverty guidelines. Detroit’s Property Tax Assistance page lists other help, including the Neighborhood Enterprise Zone homestead program and a June 30 deadline to enter a Wayne County payment plan on delinquent taxes.

For the costs you pay at closing, including prorated taxes, see closing costs in Michigan. For the city picture, see Detroit. Lenders often collect the tax monthly through an escrow account.