Overview of Michigan Taxes
Michigan has some of the highest property tax rates in the country. The Great Lake State’s average effective property tax rate is 1.35%, well above the national average of 0.90%.
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To calculate the exact amount of property tax you will owe requires your property's assessed value and the property tax rates based on your property's address. Please note that we can only estimate your property tax based on median property taxes in your area. There are typically multiple rates in a given area, because your state, county, local schools and emergency responders each receive funding partly through these taxes. In our calculator, we take your home value and multiply that by your county's effective property tax rate. This is equal to the median property tax paid as a percentage of the median home value in your county.
Michigan Property Taxes
Buying a house in Lansing? Detroit? Mackinaw City? Unfortunately, the bad news is that the state of Michigan has among the highest property tax rates in the country. The Great Lake State’s effective property tax rate is 1.35%, which comes in much pricier than the nationwide average.
On the other hand, homeowners in Michigan are protected by the state constitution from significant swings in their property taxes. The taxable value of property in Michigan can increase by no more than 5% from one year to the next. This means that even when home values are surging upwards, taxes will remain relatively steady.
If you’re considering buying a new home or refinancing your mortgage, make sure to check out our guide to Michigan mortgage rates to understand all the details of financing a home in Michigan.
A financial advisor can help you understand how homeownership fits into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
How Michigan Property Taxes Work
There are two different numbers that reflect your home’s value on your Michigan property tax bill. The first is assessed value.
In Michigan, the assessed value is equal to 50% of the market value. Local assessors determine how much a given property could sell for on the market, usually by looking at factors such as size, features and the prices of recently sold comparable properties. That number is then multiplied by 0.5 to reach assessed value.
If you buy a new home, the taxable value (the amount your taxes are based on) is equal to assessed value. From then on, however, taxable value does not necessarily have to equal assessed value. In fact, taxable value is often lower than assessed value.
That’s because the Michigan State Constitution limits the growth of taxable value to 5% or the level of inflation, whichever is lower. Thus, if your home’s value increases by 10% but inflation is only 2%, your taxable value will be lower than assessed value.
However, if you sell your home or make improvements such as adding a porch or a swimming pool, assessed value can increase by more than the cap. Regardless, taxable value will never be higher than assessed value.
Michigan Tax Rates
Tax rates in Michigan apply to your property’s taxable value. The state government levies a statewide tax of six mills and additional rates are set by local government tax authorities such as city governments and school district.
Tax rates in Michigan are expressed as mill rates. A mill is equal to $1 of tax for every $1,000 of taxable value. For example, if your total tax rate is 20 mills and your taxable value is $50,000, your taxes owed would be $1,000 annually.
Homeowners living in their principal residence in Michigan are eligible for the Principal Residence Exemption. This exempts the home from the first 18 mills in school taxes. As a result, different rates can apply to nearby properties depending on whether they serve as a principal residence.
Because of the complexity of Michigan’s property tax rules, when comparing property tax rates it is useful to look at effective tax rates. An effective tax rates is the annual amount paid as a percentage of the home value. The table below shows the average effective property tax rates for every county in Michigan. Average rates are calculated as the median annual tax payment in the county divided by the median home value.
Want to learn more about your mortgage payments? Check out our mortgage loan calculator.
Wayne County
Michigan’s Wayne County, which includes the city of Detroit, has not only the highest effective property tax rate in the state, but also some of the highest taxes of any county in the U.S. The county’s effective tax rate of 1.73% is nearly double the national average of 0.90%.
Oakland County
While Oakland County's effective property tax rate is lower than Wayne County, it's still relatively high by national standards. The county’s effective property tax rate is 1.36%. Since home values in Oakland County are significantly higher than those in Wayne County, homeowners in Oakland County generally pay more in dollar terms. The median annual real estate tax payment in Oakland County is $4,124.
Macomb County
This largely suburban county northeast of Detroit has property tax rates that rank fairly high nationally. The effective property tax rate in Macomb County is 1.47%. As a result, a homeowner with a median-valued home ($216,200) has a property tax bill of $3,186.
Kent County
Located in western Michigan, Kent County contains the city of Grand Rapids and has property tax rates lower than many of Michigan’s other urban counties. Kent County’s effective tax rate is 1.19%. At that rate, a homeowner with a home worth $242,200 (the median home value in the county), would pay $2,889 annually in property taxes.
If you have questions about how property taxes can affect your overall financial plans, a financial advisor in Grand Rapids can help you out.
Genesee County
A typical homeowner in Genesee County pays $2,323 annually in taxes. That ranks fairly high among the state’s 83 counties, but lower than most other highly populated counties. The effective property tax rate in Genesee County is 1.47%.
Washtenaw County
Washtenaw County has some of the highest home values in the state of Michigan. That is part of the reason property taxes in the county are so high. The median annual tax payment in Washtenaw County is $5,255, which ranks first in the state of Michigan.
Ingham County
Ingham County contains most of the state capital (Lansing) and the highest effective property tax rate in the state of Michigan (1.93%). This is over twice the national average.
Ottawa County
Situated on the eastern shores of Lake Michigan directly across the water from Milwaukee, Wisconsin, Ottawa County has property tax rates below the state average of 1.32%. Though the county’s effective tax rate is 1.09%. The median home value in Ottawa County is $269,200, meaning the median property tax bill is $2,936.
Kalamazoo County
This county in western Michigan has an effective property tax rate (1.52%) that ranks among the highest in Michigan. Homes in Kalamazoo County have a median value of $209,700, while the typical homeowner pays around $3,185 in annual property taxes.
Saginaw County
The typical homeowner in Saginaw County pays $2,021 annually in property taxes. That is more than $1,000 less than the median property tax bill in the United States. While the effective property tax rate in Saginaw County (1.54%) is one of the state's highest, the median home value ($131,100) leads to the relatively low median tax bill.
