Michigan housing costs at a glance
| Michigan | |
|---|---|
| Median home value (Zillow) | $270,000 |
| Average effective property tax | 1.13% |
| Typical rate for a new buyer (calculator default) | 1.6% |
| Average homeowners insurance ($300k dwelling) | $2,256 a year |
| 2026 conforming loan limit (one unit) | $832,750 |
Example: median-priced home
Michigan home for $270,000, 20% down, 6.5% 30-year fixed: principal and interest $1,365 + property tax $360 + insurance $188 = about $1,913 a month. Enter your own rate quote and the actual tax rate of the property for a precise figure.
Michigan property tax: why buyers pay more than sellers did
Michigan taxes homes on their taxable value, which can rise by at most 5% or inflation a year while you own the home. When a home is sold, the taxable value is uncapped and resets to the state equalized value (half of market value), so a buyer often pays much more than the previous owner. That is why the statewide average effective rate is about 1.13%, while a new buyer typically pays 1.5%–2%; use the calculator's default of 1.6% or ask the city for an estimate. File the Principal Residence Exemption, which removes up to 18 mills of school operating tax.
Other Michigan costs
- Transfer tax: state tax of $3.75 per $500 (0.75%) plus county tax of $0.55 per $500 (0.11%), usually paid by the seller.
- Insurance: about $2,260 a year on average for $300,000 of dwelling coverage.
- Detroit and 23 other cities also tax wages; see the Michigan paycheck calculator.
Other states
See also the Michigan paycheck calculator and mortgage costs in other states.
Frequently asked questions
Why will my Michigan property tax be higher than the seller's?
The taxable value is capped while someone owns a home and uncapped when it is sold, so the new owner is taxed on half of the current market value.
What is the monthly payment on a median-priced Michigan home?
On a $270,000 home with 20% down at 6.5%, principal and interest are about $1,365; with property tax at 1.6% and insurance the total is about $1,910 a month.
What is the Principal Residence Exemption?
An exemption from up to 18 mills of local school operating tax for your primary home; file Form 2368 with your city or township.
How much is the Michigan transfer tax?
0.75% state plus 0.11% county, so 0.86% of the price, usually paid by the seller.
For information only; not a loan offer. Property tax, insurance and closing costs depend on the specific property and lender.
Sources
- Michigan Department of Treasury – property tax
- FHFA – 2026 conforming loan limits
- U.S. Census Bureau ACS 2024 – real estate taxes (via NAHB / Construction Coverage)
- Zillow Home Value Index
- Insurify – home insurance by state
Rules checked: October 2026