Michigan Property Taxation: What Could Go Wrong?

Michigan’s 2025 Property Tax Appeal Season Has Begun

A few local units already have sent their 2025 assessment notices. Within a few weeks, virtually every Michigan local unit will have done so. For some properties, including those real property parcels that assessors have classified as agricultural or residential, an appeal to the Michigan Tax Tribunal usually requires first satisfying appeal requirements at the local level.

Michigan’s inflation cap for taxable values (on which taxes are based), will be 3.1% for 2025. When combined with the 5% increases of 2023 and 2024, some properties will have experienced a greater than 13% tax increase over a relatively short period during which cap rates for many properties have increased and property values have declined.   

For Michigan properties that assessors have classified as commercial real or industrial real, taxpayers should calendar Monday, June 2 as the appeal deadline for valuation appeals (the statutory appeal deadline is May 31, but this year, that date falls on a Saturday and, as such, the deadline will be extended to the first business day after that date—i.e., June 2). Those with property tax concerns, because of a valuation, exemption or other issue, should confer with their property tax counsel as soon as possible.

Recent Michigan Appellate Decisions Make Property Transaction Planning More Important Than Ever

In the past, we have mentioned the importance of property tax due diligence for those seeking to acquire Michigan property. In the last two years, the Michigan Court of Appeals has issued more decisions that make this more important than ever. Each year, there are taxpayers who acquire properties and agree to purchase prices without carefully estimating what will happen to property taxes the year after the acquisition. They are surprised to learn of substantial tax increases. So, our word to the wise is, do not ignore the possibility of a substantial increase in real property taxes following a purchase of a Michigan property. We stand ready to help forecast what an increase in property taxes may be following an acquisition of Michigan property, and to assist with all other aspects of an acquisition. 

Our team also assists our clients with property tax matters on a national basis. Many states have tax appeal deadlines during the first half of each calendar year. We stand ready to provide assistance to address property tax concerns in those states. Please reach out to a member of Honigman’s Real Estate Department for additional information.