How to Estimate Your New Property Taxes

In 1994 Michigan passed Proposal, "A" which capped the annual tax hike that could be levied on each homeowner, even if their house value increased. The cap is whichever number is the lower figure, the rate of inflation or 5 percent.

Since Proposal "A", every Michigan home has two values, the traditional assed value, pegged around half the market value, plus a number called the taxable value.

Why do real estate listings still quote a number for property tax? It is really what the current homeowner is paying not what you will be paying. Many buyers do not understand this and get a big surprise when their monthly payments jumps a great deal to cover the higher tax rate. So, be aware that the taxes will change from what you see on the listings.

Property taxes have two parts. The first is the mileage rate. The rate is a number from about 20 to 65 with four decimals points, e.g. $31.4862, which is the same for every homeowner in one city or township. The second part is the assessed value of your home. The assessed value is approximately half of the home's market value, e.g. If you purchased a home for $300,00, you would be assessed at approximately $150,000.

So using these two examples, to figure the tax, your taxes would be $150,000. x $31.4862 divided by $1,000. = $4,722.93 per year.