Assessments, Taxes, and How It All Works

Property taxes are based on the Assessed Value of your house. This page walks through how your property tax is calculated. Additional information can be found on the city's Assessment Division website, as well as in their FAQ and in this information packet for taxpayers.


Notice of Assessment

In early February every year, the City sends every home owner a "Notice of Assessment, Taxable Valuation, and Property Classification." (Find yours to help you follow along.) Homeowners with a NEZ homestead exemption receive two assessment notices (one for the house and one for the land).

There are four components of the property tax to look at on this form:

Assessed Value. The assessed value should be equal to 50% of the reasonable "market value" of the house, so that a house with a market value of $100,000 would have an Assessed Value of $50,000. Note that the "market value" is not necessarily the same as the actual sales price of a home. In Boston-Edison, the market value is typically lower than an actual sales price. This is because, to determine market value, the city assessor divides the city into geographical areas and compares sales of all similar homes to determine the overall market.

State Equalized Value (SEV). The State Tax Commission will "equalize" assessed values across tax jurisdictions when necessary, to ensure they do not exceed 50% of the market value. In Detroit, the SEV is generally equal to the assessed value.

Taxable Value (TV). Under Proposition A, the State capped the rate at which the taxable value can rise under a single owner at the rate of inflation (2.1% for 2018) or 5%, whichever is less. Thus, if you owned your house last year, the current year's taxable value (TV) will be last year's TV adjusted for inflation, or the current SEV, whichever is less. If you are a new owner, the TV will reset to equal the current SEV. This is known as the property tax "pop-up," where new owners may have TVs (and thus tax bills) which are larger than that of the previous owners.

Principal Residence Exemption (PRE). If you are a home owner and live in the home, you should have a PRE of 100%. The PRE affects the tax rate: non-owner-occupied homes (with a PRE of 0%) pay a higher tax rate.

Your tax is not shown on the "Notice" form. The millage rate also is not shown there. All you see is the Taxable Value. Millage rates are shown on your tax bills.


Tax Calculation

Millage rate. Property tax rates are given in "mills" rather than percent. A mill is one part in 1000, so that 10 mills equals one percent. In 2017, the city of Detroit millage rate was 68.87 mills for a principal residence (i.e., your primary home - tax rates for non-principal residences are higher). For other years, the State of Michigan keeps a record of millage rates for all municipalities in the state.

For homeowners with a NEZ homestead exemption, the millage rate is lowered, typically resulting in effective millage rates that are 30%-35% lower than the standard rate. Confusingly, the NEZ homestead exemption applies only to taxes on a house, and not the underlying land, so if you have an NEZ homestead exemption you will receive two tax bills at two different millage rates (one for the house and one for the land). However, the actual value of the land is usually less than 10% of the value of the house.

Your property tax is simply the Taxable Value times the millage rate. On a house with a TV of $100,000, the total yearly tax for 2017 (at 68.87 mills) would be $6887. 


More Information on Your Home and Taxes

For easy access to information about the taxable values of other properties in the city, see the City of Detroit parcel data, which is a free searchable database. Note that this database will in some cases not account for both property and land assessments under the NEZ homestead exemption, resulting in missing data.

For more detailed and complete information on a single house, see the City of Detroit tax record search. (You will need to first choose a municipality to see Detroit records.) This database is free if you are looking up your personal home, but a small fee (currently $2) is required when looking up other properties.

Some additional information on assessment and property tax can be found on the city's Assessment Division website, as well as in their FAQ and in this information packet for taxpayers.


Reappraisal

The city of Detroit completed a reappraisal of all the properties in the city in 2017.

The reappraisal resulted in new assessment values for virtually all homes, with these values being applied beginning with the 2017 Summer tax bills. Your home may have very different values before and after the reappraisal.

Read the City of Detroit Reappraisal FAQ for more information,

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