EAST LANSING, Mich. – Michigan homeowners will likely see an increase in their property tax bill in 2025, according to new analysis from economic consulting firm Anderson Economic Group, LLC. AEG estimates that the taxable value of homes will increase 3.3% in 2025, which is down from back-to-back increases of 5% in 2024 and 2023, and in-line with an increase of 3.3% in 2022.

In Michigan, increases in the taxable value of a residence are limited to the rate of inflation or 5%, whichever is less. This limit does not apply to any increases in value from new construction or remodeling. It also does not apply to property sold in the past year, when the taxable value is reset to the state equalized value. Depending on the market, the rate of inflation may be more or less than the change in a property’s sale or equalized value. For example, a home with a taxable and equalized value of $120,000 in a market with 5% appreciation in 2024 will experience an increase in equalized value to $126,000 and taxable value of $123,960 in 2025.

AEG’s analysis considers changes in consumer prices over the last year and expected increases over the next year. It then applies the same calculations used by the Michigan Department of Treasury to measure the increase in taxable valuable set by law. Although most of the increase is already baked into the state’s calculations, the actual change could be slightly lower or higher if inflation drops or jumps sharply over the next few months.

“Paying more in property taxes is not something Michiganders relish doing, especially with their finances being strained by other costs,” said Max Melstrom, a consultant at AEG and associate professor at Loyola University Chicago. “If there is a silver lining, it is that our analysis shows inflation is down significantly from the year before, so the increase may not be as much as some expect.”

Additional commentary and data from AEG is available upon request.

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About Anderson Economic Group
Founded in 1996, Anderson Economic Group works with public, private, and non-profit organizations, specializing in economic impact, business valuation, expert testimony, and public policy. Anderson Economic Group has assisted governments, universities, corporations, and businesses across the U.S. and abroad. All of the firm’s work is grounded in the core values of professionalism, integrity, and expertise. Anderson Economic Group has offices in East Lansing, Michigan and Chicago, Illinois. For more information or to speak with one of our experts, visit andersoneconomicgroup.com.