Property Tax Rate in Michigan 2025 — Effective Rate, Median Bill, Homestead

1.38% Effective property tax rate

$2,767 Median annual bill (ACS 2022)

135% Of U.S. national median

5% or CPI cap Annual assessment cap

    Homestead exemption: Principal Residence Exemption (PRE) exempts owner-occupied homes from 18 mills of school operating tax. Proposal A caps annual taxable value growth at 5% or CPI.

    Statutory authority: MCL § 211.7cc

What the median Michigan homeowner pays

Median annual property tax (ACS 2022, B25103)$2,767

= Median monthly property tax$231

Effective rate (Tax Foundation 2024)1.38%

Tax per $100,000 of home value$1,380

Median bill is the actual ACS 2022 figure for owner-occupied housing units in Michigan. Your specific bill will vary by county and municipality — local mill rates can swing the effective rate by 30%+ within a single state.

What This Means for Investment Property in Michigan

The effective property tax rate is the single most important fixed operating expense for buy-and-hold rental property. At 1.38%, every $100,000 of Michigan property value generates approximately $1,380 in annual property tax — money that comes off the top before any other expense, debt service, or vacancy reserve.

Michigan's effective rate of 1.38% is roughly in line with the U.S. median (~1.02%). Within the state, however, county and municipal mill rates can vary widely — always verify the actual bill from the county assessor before underwriting.

Investor warning: Michigan's 5% or CPI cap applies only to owner-occupied primary residences. When you acquire a property as a non-owner-occupant rental, the cap typically does NOT apply, and the property may be reassessed to current market value at transfer. Build the post-transfer reassessment into your year-1 underwriting.

Homestead Exemption Detail for Michigan

Principal Residence Exemption (PRE) exempts owner-occupied homes from 18 mills of school operating tax. Proposal A caps annual taxable value growth at 5% or CPI.

The exemption is granted under MCL § 211.7cc. To claim it, owner-occupants must typically file an application with the county assessor (most states require filing once, with renewal triggered only by change of ownership or use). Failure to file the application means full taxation at the non-homestead rate.

How Michigan Compares Nationally

U.S. national median effective rate: ~1.02% (Tax Foundation 2024).
Highest effective rate state: New Jersey (2.23%).
Lowest effective rate state: Hawaii (0.32%).
Michigan rank: Effective rate of 1.38% — see the full ranking table.

Sources & Methodology

Effective rate: Tax Foundation, "Property Taxes Paid as a Percentage of Owner-Occupied Housing Value," 2024 publication using U.S. Census Bureau American Community Survey 2022 5-year estimates (Tables B25103 and B25077).
Median bill: U.S. Census Bureau ACS 2022 5-year, Table B25103 (Median Real Estate Taxes Paid for Owner-Occupied Housing Units).
Homestead exemption and assessment cap: MCL § 211.7cc and Michigan Department of Revenue / Assessor publications.

Related Guides for Michigan Landlords

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Frequently Asked Questions

What is the property tax rate in Michigan?

The effective property tax rate in Michigan is 1.38% of fair market value, according to Tax Foundation analysis of U.S. Census Bureau ACS 2022 data published in 2024. The median Michigan homeowner pays $2,767 annually in property taxes. That is approximately 135% of the U.S. national median effective rate of 1.02%.

What is the homestead exemption in Michigan?

Principal Residence Exemption (PRE) exempts owner-occupied homes from 18 mills of school operating tax. Proposal A caps annual taxable value growth at 5% or CPI. Statutory authority: MCL § 211.7cc.

Do investment properties get the same tax breaks in Michigan?

Generally no. Homestead exemptions, primary-residence assessment caps, and senior/disabled credits in Michigan apply only to owner-occupied primary residences. Rental properties are typically taxed at full assessed value with no cap on annual reassessment growth, unlike owner-occupied homes which benefit from the 5% or CPI cap.

How are property taxes calculated in Michigan?

Local assessors determine fair market value (or taxable value, depending on the state). The taxable value is then multiplied by the local millage rate set by counties, municipalities, school districts, and special districts. Michigan's effective rate of 1.38% reflects the combined burden of all local taxing jurisdictions on the underlying market value of the property.

Effective rate source: Tax Foundation analysis of Census ACS 2022 (published 2024). Statutory citation: MCL § 211.7cc. Last updated April 29, 2026. For informational purposes only — not tax or legal advice. Consult a CPA or tax attorney for your specific situation.