When are my property taxes due?

Property taxes can be confusing, here's a breakdown of when they're due and how they're calculated. Michigan has two property taxes that are due every year, summer and winter. A summer tax is billed yearly from July 1^st and run through June 30^th of the following year. (as an example; summer tax due July 1, 2023 will be paid up to June 30th of 2024) Winter taxes are billed yearly from December 1^st and run through November 30^th of the following year, same as the summer. A common misunderstanding is, taxes are paid for six months each, which leads to some confusion.

Are property taxes in Michigan paid in advance?

Michigan property taxes are paid in advance for a full year. So, what does this mean when you are buying or selling your home. Traditionally the buyer will pay for the un-used portion of the taxes and is not responsible for any part of the real estate tax between the levy date and the date of the real estate transaction “closing”. The buyer is responsible for that part of EACH tax from the closing date to and including the last day of the twelve-month tax period. Which means the proration of taxes that were paid in advance are reimbursed to the seller.

How do they calculate the taxe proration?

When a home is sold the title company will divide the tax amount into 365 day increments and they are calculated by how many days the seller has used from the due date of the tax to the closing date, to determine how much of the summer and winter taxes have been used. Thus, the seller is refunded by the buyer any unused portion of taxes. 

Can the proration of property taxes be waived?

The common practice in the real estate industry is for the buyer to pay the seller any unused portion of the property taxes but, ocassionaly the question arises in a real estate transaction of waiving property tax prorations. Meaning, the buyer would not pay the proration back to the seller and the seller would waive any proration due them, giving up any credit they had coming at closing. Again, this is not common practice in a real estate transaction but can be negotiated into a deal between a buyer and seller when trying to hash out negotiations and will not be itemized at closing. In certain circumstances, this negotion is necessary to accomplish the right bottom line figure.

For more information on property taxes and frequently asked questions in Michigan, visit the state site here: State of Michigan FAQ

Contact Joe with any questions here: Joe's contact information