Michigan Is Considering Lowering Property Taxes: What Homeowners Need to Know

Michigan homeowners could see major changes to property taxes in the future.

Lawmakers are currently discussing a package of proposals aimed at reducing the cost of owning a home by lowering certain taxes tied to real estate. While nothing has officially changed yet, the discussion has gained attention because it could impact homeowners, buyers, sellers, and even future housing affordability across Michigan.

If approved, these changes could become one of the most significant property tax reforms Michigan has seen in years.

Here’s what’s being proposed — and what it could mean for you.

1. Eliminating Michigan’s 6-Mill State Education Tax

One of the biggest proposals involves removing the 6-mill State Education Tax (SET).

This tax appears on many Michigan property tax bills and helps fund education statewide. Eliminating it could reduce annual property tax costs for homeowners.

Supporters of the proposal argue this would provide meaningful savings for Michigan residents who continue facing higher housing costs, inflation, and increased living expenses.

How much someone could save would depend on factors like:

• Home value
• Taxable value
• Local municipality
• School district

For some homeowners, savings could potentially add up to hundreds or even over a thousand dollars annually.

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2. Changes to Michigan’s “Pop-Up Tax”

This is one of the most misunderstood parts of owning a home in Michigan.

Many buyers are surprised when their property taxes increase significantly after purchasing a house.

Why does that happen?

Michigan limits how much a home's taxable value can increase while the owner keeps the property. However, when the home sells, the taxable value often “uncaps” and resets closer to market value.

That means:

A seller may have paid taxes based on years of capped increases…

…but a new buyer may inherit a much higher tax bill the following year.

This is commonly referred to as the “pop-up tax.”

The proposal being discussed would reduce or eliminate this reset process.

If approved, buyers could benefit from:

✅ More predictable housing costs
✅ Fewer surprises after closing
✅ Improved affordability for first-time buyers

As a Realtor, I often encourage buyers to estimate future taxes before purchasing because the current tax bill doesn’t always reflect what they’ll actually pay after closing.

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3. Eliminating Certain Real Estate Transfer Taxes

Michigan currently charges taxes when property ownership transfers during a sale.

The proposal includes removing some of these costs.

Potential impacts:

For buyers: Lower transaction costs at closing

For sellers: Reduced expenses associated with selling a property

While this alone may not dramatically change affordability, every reduction in closing costs can help.

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4. The Bigger Question: How Would Michigan Replace Lost Revenue?

Property taxes fund important public services, including:

• Schools
• Infrastructure
• Emergency services
• Local government operations

One of the biggest debates surrounding these proposals is how Michigan would replace billions in potential lost revenue if taxes are reduced.

Because of that, experts expect additional discussions, revisions, and negotiations before anything becomes final.

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What Michigan Homeowners Should Do Right Now

The most important thing to understand:

Nothing changes today.

These are proposals — not new laws.

However, if you’re:

• Thinking about buying a home
• Planning to sell in the next few years
• Curious about future property costs
• Wondering how taxes affect affordability

…it’s worth paying attention to these conversations.

Property taxes often impact affordability just as much as mortgage rates.

Understanding both can help homeowners make smarter long-term decisions.

I’ll continue following updates and sharing changes as they happen.

If you have questions about Michigan property taxes, buying, selling, or what taxes may look like on a specific property, feel free to reach out.

—
Angelo Naci
Real Estate Advisor | Metro Detroit
📲 586.556.6495 | 248.213.8020
📧 angelonacirealtor@gmail.com
💻 homeswithangelo.com