Calculating Michigan Property Taxes for your second home

In Michigan you do not inherit the current owner’s taxes; they come uncapped the year following the property transfer. A good estimator for future property taxes, if you are shopping for a second home in the Harbor Country area of SW Michigan, is about 2% of the purchase price. Here is additional information about Michigan property taxes:

  • We pay current year’s property taxes, they are prorated at closing.
  • Property taxes are calculated multiplying the municipality and county tax millage rate by the Taxable Value.
  • The tax assessor keeps track of two numbers, one is the State Equalized Value (SEV) and the other is the Taxable Value.
  • Normally when a property sells, the SEV becomes the new Taxable value. 
  • The assessor does have an opportunity to change the SEV on or before December 31st, if they think it’s under assessed. This change is based on recent real estate sales in the immediate area.
  • If you think the tax assessor has over assessed, you have an opportunity once per year to challenge them at a tax tribunal.
  • There are also two tiers for taxes, one for full time residents, and one for business/second home/investment properties.
  • This calculator may be helpful. https://treas-secure.state.mi.us/ptestimator/PTEstimator.asp

Once the new taxable amount is established, the yearly increase is 5% or the cost-of-living percentage, whichever is less. The only time it would uncap again is if you did any construction that would require a permit. The amount of the improvement would be added to the taxable figure.

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