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Michigan's Proposal A caps your property tax increase at 5% per year — but the cap resets when you sell

Updated 2026-06-24  ·  0 primary sources linked  ·  All sides presented

Michigan's Proposal A caps your property tax increase at 5% per year — but the cap resets when you sell

Michigan's Proposal A (1994) caps annual property tax increases for homeowners at the rate of inflation or 5%, whichever is lower — regardless of how fast your home's market value rises. The cap resets to full market value when the property sells. In Cascade Township, where home values rose 12–15% in 2025, long-term owners saved hundreds per year. If you think your assessment is wrong, appeal to the Board of Review each March. New buyers pay taxes on full market value from day one.

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Michigan's Proposal A caps your property tax increase at 5% per year — but the cap resets when you sell


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How Michigan Property Taxes Work

Michigan's Proposal A (1994) created two different values for every property: the State Equalized Value (SEV), which tracks 50% of market value, and the Taxable Value (TV), which determines what you actually pay taxes on. Your tax bill is based on Taxable Value multiplied by your local millage rate.

The key rule: Taxable Value can only increase by the lesser of 5% or the rate of inflation each year — no matter how much home prices rise. But when a property is sold, Taxable Value resets to the SEV. This is called uncapping.

What This Means for Homeowners
  • If you've owned your home for 10+ years: Your Taxable Value is likely significantly below market value. You're paying less than a new buyer of the same home would pay.
  • If you just bought a home: Your Taxable Value uncapped at purchase — expect your first full year's tax bill to be higher than the prior owner's.
  • In Cascade Township: With median home values around $450,000 and strong appreciation, long-term owners commonly have Taxable Values 30–50% below SEV.
  • Principal Residence Exemption (PRE): If this is your primary home, you qualify for the PRE, which removes 18 mills of school operating tax from your bill. File Form 2368 with your local assessor if you haven't already.
The Policy Debate
Protects homeowners
  • Prevents long-term owners — especially retirees on fixed incomes — from being taxed out of homes they've owned for decades.
  • Provides predictable tax bills that let families plan financially.
  • West Michigan home values have risen 60–80% since 2018; without the cap, many families would face unaffordable tax increases.
Distorts the market
  • Creates a "lock-in" effect — long-term owners face a big tax increase if they move, so they stay put even when they'd prefer a different home.
  • Reduces housing turnover, which constrains supply and contributes to higher prices for buyers.
  • Shifts the tax burden to new buyers, who pay more than long-term owners for equivalent properties.
Practical Steps
  • Check your assessment notice (February/March): Your assessor mails a Notice of Assessment each year. If your SEV seems too high, you have 30 days to appeal to the Board of Review.
  • File the PRE if you moved: Form 2368, filed with the Cascade Township Assessor's office. Deadline is May 1 for the current tax year.
  • Cascade Township Assessor: cascadetwp.com/government/departments/assessor