Michigan Property Tax Law Changes 2026: What Homeowners Need to Know

Updated March 2026

Key Takeaway

Michigan's Proposal A (1994) created a dual-value system: State Equalized Value (SEV) at 50% of market value, and Taxable Value capped at CPI or 5% annual increases (whichever is lower). When property transfers, the taxable value uncaps to the SEV, which can cause dramatic tax increases for buyers. The Homestead Property Tax Credit provides up to $1,600 on your state income tax return.

Michigan Property Tax Snapshot: 2026

Median home value: $162,600
Average annual tax: $2,504
Effective tax rate: 1.54%
Assessment ratio: 50% of market value
Reassessment cycle: annual

Proposal A: SEV vs. Taxable Value

Michigan's most important property tax concept is the difference between SEV and Taxable Value:

State Equalized Value (SEV): 50% of estimated market value, updated annually
Taxable Value (TV): Capped at CPI or 5% increase per year (whichever is lower) from Proposal A (1994)
Gap: Long-term owners often have a Taxable Value far below their SEV

The critical event: When property is sold, the Taxable Value uncaps and resets to the SEV. This means a home that's been taxed on a TV of $60,000 might reset to an SEV of $100,000 overnight, nearly doubling the new owner's tax bill. This is the #1 surprise for Michigan home buyers.

Homestead Property Tax Credit

Michigan's Homestead Property Tax Credit is claimed on your state income tax return:

Equals 60% of property taxes that exceed 3.5% of household income
Maximum credit: approximately $1,600
Income limit: approximately $63,000
Available to homeowners and renters (renters use 20% of rent as property tax equivalent)

Principal Residence Exemption (PRE)

The Principal Residence Exemption exempts your home from the 18-mill non-homestead school operating tax. This saves approximately $2,000-$3,000/year on a typical home. You must file an affidavit (Form 2368) to claim it. If you move, you must rescind the PRE on your former home. Having PRE on two homes simultaneously is fraud.

Summer Tax Deferment for Seniors

Michigan allows seniors 62+ with income below approximately $40,000 to defer summer property tax payments to February without penalty. This provides cash flow relief for seniors on fixed incomes who struggle with the mid-year summer tax bill.

Board of Review: First Monday After March 6

Michigan's appeal deadline is the first Monday after March 6 (the March Board of Review). Your local Board of Review meets in March to hear assessment disputes. You can also appeal to the Michigan Tax Tribunal by July 31 (residential properties). Bring comparable sales evidence showing your property's market value is lower than twice the SEV.

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Michigan Appeal Process

Filing deadline: First Monday after March 6
File with: Board of Review
Evidence needed: Comparable sales, property condition photos, record corrections

2026 Action Checklist

Review your assessment notice when it arrives
Verify all exemptions are applied (homestead, senior, veteran)
Compare your assessed value to recent comparable sales
File your appeal by First Monday after March 6 if over-assessed
Check your property record for errors (square footage, features, classification)

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