What happens to taxable value when a property transfers ownership?

(If you just bought your home, you want to read this!)

In the year following the purchase of a property, the Taxable Value becomes equal to the Assessed Value. This is commonly referred to as “uncapping.” In the second year after a property is purchased, the Taxable Value is again capped, and may only increase by the Inflation Rate Multiplier (IRM) or 5%, whichever is less, provided there is no new construction or losses. In Michigan, taxes are based on Taxable Value. Taxable Value can never be greater than the Assessed Value.

When a property transfers ownership, the taxable value uncaps to the current assessed value.  This is one (1) of the impacts of Proposal A of 1994 that the voters of Michigan passed.  For an example:

2021 Taxable Value            105,000

2021 Assessed Value         150,000

Date of sale 07/01/2021

2022 Taxable Value            150,000

2022 Assessed Value         150,000

 This is a STATE law and the local government or board of review have no authority to change this impact.

 Link to bulletin 15 of 2021:


Link to bulletin 17 of 2021:


Unfortunately, Proposal A is typically no longer stressed to new buyers during the process of buying property in Michigan.  The officials at the Township are not aware of a transfer until after it occurs and become responsible for educating the new buyer.


Show All Answers

1. What is market value?
2. Why have a property tax?
3. How is property appraised?
4. Why do assessed values change from year to year?
5. What are your rights and responsibilities?
6. What happens to taxable value when a property transfers ownership?
7. What is a conditional rescission?
8. How do I read an Assessment?