Overview of Michigan Taxes
Michigan has among the highest property tax rates in the country. The Great Lake State’s average effective property tax rate is 1.71%, ninth highest in the country and well above the national average.
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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.
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Jennifer Mansfield Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Michigan Property Taxes
Buying a house in Lansing? Detroit? Mackinaw City? Bad news: the state of Michigan has among the highest property tax rates in the country. The Great Lake State’s average effective property tax rate is 1.71%, ninth highest in the country and well above the national 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. Read on to learn more about that and other important Michigan property tax rules.
Want to learn more about your mortgage payments? Check out our mortgage loan calculator.
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 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.
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.
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. Thus, 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.
|County||Median Home Value||Median Annual Property Tax Payment||Average Effective Property Tax Rate|
Michigan’s Wayne County, which contains the city of Detroit, has not only the highest property tax rates in the state but also some of the highest taxes of any county in the U.S. The county’s average effective tax rate of 2.96% is more than double the national average and is the 31st highest rate in the country.
Why the high taxes? Well, in short, Detroit has the highest property tax rates of any major city in the country. The mill rate in Detroit for principal-residence homeowners is 68.8675 mills. That is equal to an effective rate of 3.44% for house with a taxable value equal to assessed value. At that rate, the annual taxes on a home worth $100,000 would be $3,440.
While property taxes in Oakland County aren’t as high as those in Detroit, they are still relatively high by both state and national standards. The county’s average effective property tax rate is 1.73%, which ranks as the 12th highest in the state. 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 $3,314, second highest in the state (behind Washtenaw County).
This largely suburban county northeast of Detroit has property tax rates that rank among the 250 highest nationally. The average effective property tax rate in Macomb County is 1.87%. In Sterling Heights, the most populous city in the county, mill rates on principal residences range from 36.79 mills to 55.6519 mills, depending on school district. Those are roughly half the mill rates in Detroit.
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 average effective tax rate is 1.60%. At that rate, a homeowner with a home worth $145,000, about the median home value in the county, would pay $2,320 annually in property taxes.
A typical homeowner in Genesee County pays $1,822 annually in taxes. That ranks as the 24th highest of the state’s 83 counties but lower than most other highly populated counties.
Genesee County’s largest city is Flint. The most recent tax rate in Flint is 50.1838 mills for homeowners living in their principal residence. On other types of residential property (second homes, vacation homes, etc.) the full tax rate is 68.1838 mills.
On average Washtenaw County has the second highest home values in the state of Michigan (behind Leelanau County, which encompasses the Leelanau Peninsula north of Traverse City). That is part of the reason property taxes in the county are so high. The median annual tax payment in Washtenaw County is $3,905, which ranks first in the state of Michigan.
Ingham County contains most of the state capital (Lansing) and has the second highest property tax rates in the state of Michigan. The average effective rate, including all parts of the county, is 2.28%. This is nearly twice the national average.
In Lansing the mill rate on principal residences is 46.5616 mills. In neighboring East Lansing (home to the main campus of Michigan State University) the rate is even higher at 53.5128 mills.
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. The county’s average effective tax rate is 1.44%. The taxes on a home worth $150,000 would be $2,160 annually at that rate.
This western Michigan County has property tax rates that rank among the 10 highest in Michigan. In the city of Kalamazoo the tax rate on principal residences is 47.82 mills. For a home with a taxable value equal to the full assessed value (which is 50% of market value), the annual taxes would be 2.39% of home value.
The typical homeowner in Saginaw County pays $1,657 annually in property taxes. That ranks as just the 32nd highest median property tax bill in Michigan and is $540 less than the national average.
Property Tax: Which Counties are Getting the Best Bang for Their Buck
SmartAsset’s interactive map highlights the places across the country where property tax dollars are being spent most effectively. Zoom between states and the national map to see the counties getting the biggest bang for their property tax buck.
Our study aims to find the places in the United States where people are getting the most for their property tax dollars. To do this we looked at school rankings, crime rates and property taxes for every county.
As a way to measure the quality of schools, we analyzed the math and reading/language arts proficiencies for every school district in the country. We created an average score for each district by looking at the scores for every school in that district, weighting it to account for the number of students in each school. Within each state, we assigned every county a score between 1 and 10 (with 10 being the best) based on the average scores of the districts in each county.
For each county, we calculated the violent and property crimes per 100,000 residents.
Using the school and crime numbers, we calculated a community score. This is the ratio of the school rank to the combined crime rate per 100,000 residents.
We used the number of households, median home value and average property tax rate to calculate a per capita property tax collected for each county.
Finally, we calculated a tax value by creating a ratio of the community score to the per capita property tax paid. This shows us the counties in the country where people are getting the most bang for their buck, or where their property tax dollars are going the furthest.
Sources: US Census Bureau 2017 American Community Survey, Department of Education, Federal Bureau of Investigation, State Police or Justice Department websites