What is the property tax rate in Michigan?
Michigan property tax averages 1.19% of market value for owner-occupied homes (Tax Foundation 2026, using the 2024 American Community Survey). That is below Ohio at 1.36% and Illinois at 1.88%, and above Indiana at 0.76%.
Michigan bills are figured in mills on taxable value. One mill is $1 of tax per $1,000 of taxable value, and taxable value is usually well under market value for property that hasn’t sold in years. For a rental building, the rate that matters is the non-homestead rate, which includes 18 school operating mills that owner-occupied homes don’t pay.
How Michigan sets value: SEV and taxable value
Every Michigan parcel has two numbers. State equalized value (SEV) is the assessed value as equalized, and under Article IX, Section 3 of the Michigan Constitution it may not exceed 50% of true cash value. Taxable value is the number the millage is applied to, and it is capped.
Under MCL 211.27a(2), taxable value can rise each year by no more than the lesser of 5% or the inflation rate, plus additions such as new construction, and it can never exceed SEV. Article IX, Section 3 sets the same limit for taxes levied in 1995 and later. For 2026 the State Tax Commission set the inflation rate multiplier at 1.027 in Bulletin 14 of 2025, so capped taxable value could rise by no more than 2.7% this year. For a building owned since the 1990s or 2000s, years of capped growth usually leave taxable value far below SEV.
Apartment buildings with more than four units are classed as commercial real property under MCL 211.34c. The classification matters for appeal deadlines, covered below.
Does a sale trigger reassessment in Michigan?
Yes. A transfer of ownership uncaps taxable value. Under MCL 211.27a(3), for the calendar year after the transfer, taxable value is reset to the property’s SEV, and the cap starts again from that new level.
This is the most important Michigan property tax fact for a seller, because the buyer will not inherit your tax bill. A buyer underwriting your building looks at SEV, not your taxable value, and prices the higher bill into the offer.
The buyer must also file notice of the transfer with the local assessor within 45 days, under MCL 211.27a(10), on the State Tax Commission’s form. For commercial property selling for $100 million or less, the late penalty under MCL 211.27b is $20 a day, up to $1,000.
Michigan millage rates for apartment buildings
In the sample below, non-homestead totals run from about 57 to 69 mills. The table shows 2025 totals for a handful of cities from the Department of Treasury’s statewide report, for the city’s own school district.
Treasury’s report lists two main totals for each area. The principal residence total is what an owner-occupied home pays. The non-homestead total, in the report’s column headed NonHomestead, applies to rental apartments and is up to 18 mills higher, matching the school operating levy under MCL 380.1211 that principal residences are exempt from. That levy is 18 mills or the district’s 1993 level if lower, which is why the gap in Alpena is 17.92 mills rather than 18. Both totals include the 6-mill state education tax, which MCL 211.903 levies on all non-exempt property.
- The report does not publish county averages, and the version we could read stopped partway through the counties starting with C, so Detroit, Grand Rapids, Lansing and Ann Arbor are not shown. Look up your own city and school district in the full report.
- Rates differ inside a city when parts of it fall in different school districts, as the Benton Harbor and St. Joseph rows show.
| City and school district (county) | Non-homestead total, 2025 (mills) | Principal residence total (mills) |
|---|---|---|
| Battle Creek, Battle Creek Public Schools (Calhoun) | 68.7948 | 50.7948 |
| Bay City, Bay City School District (Bay) | 64.7281 | 46.7281 |
| Benton Harbor, Benton Harbor Area Schools (Berrien) | 62.0007 | 44.0007 |
| St. Joseph, St. Joseph Public Schools (Berrien) | 57.7484 | 39.7484 |
| Alpena, Alpena Public Schools (Alpena) | 56.6557 | 38.7403 |
How Michigan property tax is calculated
Multiply taxable value by the total millage for your area and divide by 1,000. A building with $640,000 of taxable value in Battle Creek’s main school district, at 68.7948 non-homestead mills, owes about $44,029 a year.
Because the rate applies to taxable value and taxable value is capped, two identical buildings on the same street can have very different bills. One bought last year pays on a taxable value equal to SEV, about half of market value. One held for two decades may pay on a taxable value well below that. The Tax Foundation’s 1.19% average reflects owner-occupied homes with the principal residence exemption and years of capped growth, so it understates what an apartment buyer will pay.
How to appeal property taxes in Michigan
Apartment owners have two routes. You can protest your assessment at the March board of review in your city or township, or, because buildings with more than four units are commercial property, you can skip the board and petition the Michigan Tax Tribunal directly.
The Tax Tribunal deadline for commercial real property is May 31 of the tax year, under MCL 205.735a(6). In 2026 May 31 fell on a Sunday, so the State Tax Commission calendar lists June 1. Residential and agricultural property has until July 31 but must go through the March board first. July and December boards of review also meet each year.
- March 9, 2026: March boards of review begin, on the second Monday in March, with an alternate start of March 10 or 11 where allowed.
- June 1, 2026: last day to petition the Tax Tribunal for commercial property, since May 31 was a Sunday.
- July 21 and December 15, 2026: July and December boards of review convene.
Exemptions and the principal residence rule
The principal residence exemption, which removes the 18 school operating mills, is for owner-occupied homes and does not cover rental apartments. That is why the non-homestead totals in the table sit up to 18 mills above the principal residence totals.
Some buildings carry a local abatement or a payment-in-lieu-of-tax agreement, usually tied to affordable or new housing. Which ones apply, and whether they survive a sale, depends on the agreement and the local unit. If your building has one, give the agreement and its end date to any buyer early, because it changes their tax projection more than anything else on this page.
Worked example: property tax on a $2M Michigan apartment building
Take a 20-unit building in Battle Creek, in the Battle Creek Public Schools district, with a true cash value of $2,000,000. Its SEV is $1,000,000, half of true cash value. The current owner bought years ago, and capped growth has left taxable value at $640,000. At 68.7948 non-homestead mills, this year’s tax is about $44,029.
A buyer pays $2,000,000. In the calendar year after the sale, taxable value uncaps to SEV, $1,000,000, and the tax becomes about $68,795. That is $24,766 more a year that comes straight off the buyer’s NOI. At an illustrative 7% cap rate, it is worth about $353,802 of value.
The same uncapped $1,000,000 taxable value would carry about $64,728 in Bay City, $62,001 in Benton Harbor and $57,748 in St. Joseph. After the reset, the cap applies again, so the buyer’s taxable value grows by no more than 5% or inflation each year until the next sale.
| Scenario | Taxable value | Yearly tax |
|---|---|---|
| Battle Creek, seller’s capped value | $640,000 | $44,029 |
| Battle Creek, uncapped after sale | $1,000,000 | $68,795 |
| Bay City, uncapped | $1,000,000 | $64,728 |
| Benton Harbor, uncapped | $1,000,000 | $62,001 |
| St. Joseph, uncapped | $1,000,000 | $57,748 |
Michigan compared with other Great Lakes states
Michigan sits in the middle of the Great Lakes group. Its 1.19% effective rate ranks 14th highest of the 47 states this site covers on the Tax Foundation’s 2026 list, behind Illinois, Ohio and Wisconsin and ahead of Minnesota and Indiana.
The headline rate hides Michigan’s biggest difference from its neighbors: the reset at sale. In a state without uncapping, a long-time owner’s low bill can carry over to the buyer. In Michigan it cannot, so comparing a Michigan building with one in Ohio or Indiana means comparing the Michigan buyer’s uncapped bill, not the seller’s.
| State | Effective rate (Tax Foundation 2026) |
|---|---|
| Illinois | 1.88% |
| Ohio | 1.36% |
| Wisconsin | 1.32% |
| Michigan | 1.19% |
| Minnesota | 1.00% |
| Indiana | 0.76% |
How uncapping affects your sale price
Expect a buyer to price your building on the uncapped bill. In the example, the gap between your bill and the buyer’s is worth more than $350,000 at a 7% cap rate, and no negotiation makes it disappear, since it is set by statute.
What you can do is make the buyer’s math easy and accurate. Provide the last three tax bills showing both SEV and taxable value, the millage for your exact school district, and any abatement paperwork. A buyer who sees the real uncapped figure early is less likely to re-trade the price late in the deal. Selling the entity that owns the building instead of the building itself does not avoid this: under MCL 211.27a(6)(h), conveying more than 50% of the ownership interests in a corporation, partnership or LLC is a transfer of ownership, with limited exceptions, so ask your attorney before relying on any structure.
Selling an apartment building in Michigan
Skyline buys apartment buildings with five or more units in Michigan. We buy directly, close on your timeline, and can work inside 1031 deadlines. We underwrite on the uncapped tax from the start, so the price we discuss early is the price we expect to close at.
For the tax on the sale itself, see Michigan capital gains tax on real estate, and for tenant rules, Michigan landlord-tenant law for apartment owners.
