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Michigan Property Tax Law

For Current Owners

Property owners can calculate their tax bill by multiplying the taxable value by the tax rate. In Michigan, the property tax rate is called a millage, and it is figured in mills. A mill equals $1 in taxation for every $1,000 in taxable value.

A parcel may have several millages in its tax rate. There is likely to be a millage to operate village and/or township government, and another for the county. Part of the millage rate may include mills for police, fire or schools and public transportation.
Homestead Property is defined as a property owned and occupied as a principal residence by the owner of the dwelling or unit.

In Michigan, taxes are determined by multiplying value by the rate.

Until 1994, property was valued, for tax purposes, at half its market value. This was called its State Equalized Value, or SEV. In 1994, Michigan voters passed Proposal A. Proposal A limits the growth of property tax assessments. Now, we don’t use SEV. We use “taxable value.”

The taxable value will be the lowest number out of these four:

  • This year’s SEV
  • Last year’s taxable value plus 5 percent
  • Last year’s taxable value plus inflation
  • Last year’s taxable value times this year’s SEV divided by last year’s.

Basically, this formula limits the growth in taxable value to 5 percent a year or less. This limit on taxable value assumes no significant change to the property: no new family room, no major fire.

Here is a tax bill calculation for a homestead property in the Northport School District of Leelanau Township with a taxable value of $100,000: The annual tax bill will be: 18.63 / 1000 * $100000 = $1863

For Future Owners: The cap comes off when a property is sold. In the year after the sale, taxable value kicks up to the SEV, but just for that year. Then the limit applies to future increases, until there is another sale.

Please note: The explanation above is intended to be informational. For specific property tax information, consult with the Township Assessor. Also, the State of Michigan has a helpful explanation video and a property tax estimator on its website go to www.michigan.gov/propertytaxesestimator.