Ann Arbor Property Tax: Rates, Payments, and Appeals

Ann Arbor property tax bills arrive twice a year and are calculated by multiplying your parcel’s taxable value by the combined millage rate levied by the city, Washtenaw County, your school district, and several smaller authorities. One mill equals $1 of tax per $1,000 of taxable value, so a home with a taxable value of $200,000 in a district levying 55 total mills owes roughly $11,000 a year before exemptions.¹ Your actual rate depends on which school district your parcel sits in and whether you qualify for the Principal Residence Exemption, which removes the local school operating millage for owner-occupied homes.

How Your Bill Is Calculated

Assessed Value and State Equalized Value

The Ann Arbor City Assessor sets your parcel’s assessed value at 50 percent of estimated market value, the ratio required by Michigan’s constitution.² Market value means the price a willing buyer would pay in a private sale under normal conditions.³ The state then reviews local assessments and can adjust them so every jurisdiction is valuing property at that same 50-percent ratio. The adjusted figure is the State Equalized Value, or SEV.

Taxable Value and the Proposal A Cap

Your bill isn’t based on the SEV. It’s based on a separate figure called taxable value, capped by the 1994 constitutional amendment known as Proposal A. Each year your taxable value can rise by no more than 5 percent or the rate of inflation, whichever is lower, no matter how fast your home’s market value climbs.² That cap is why longtime Ann Arbor homeowners often carry a taxable value well below half of what their home would actually sell for.

The cap resets when the property changes hands. In the year after a sale, the new owner’s taxable value jumps up to match the current SEV. This is called uncapping, and it catches first-time buyers off guard. If the seller held the home for 15 or 20 years, the tax bill you inherit will be substantially higher than what they were paying.

Millage Rates

Multiply your taxable value by the total millage rate and divide by 1,000 to get your annual tax. The total is an aggregate of levies from the city, Washtenaw County, your local school district, the Ann Arbor District Library, Washtenaw Community College, and several smaller authorities.¹ Because rates vary by school district, two homes a block apart can face different millages. The city publishes an updated millage summary each year on its property taxes page.

When Payments Are Due

Summer taxes are payable starting July 1 and due without penalty by July 31. Winter taxes are payable starting December 1 and due without penalty by December 31.⁴ Every bill carries a 1-percent property tax administration fee authorized by state law.¹ Miss the deadline and 1 percent interest accrues for each month you’re late.⁵ A payment made in October on a delinquent summer bill would include the base tax, the 1-percent administration fee, and 2 percent in accumulated interest.

Real property taxes still unpaid at the end of February are turned over to the Washtenaw County Treasurer as delinquent, with additional penalties and interest added starting March 1.⁴ Once that happens, you’re dealing with the county, not the city.

How to Pay

The City of Ann Arbor accepts property tax payments through several channels: online, by phone (with a 2.85-percent processing fee on card payments and no fee for ACH), by mail to the treasurer’s Detroit lockbox, at drop boxes on East Ann Street and inside Larcom City Hall at 301 E. Huron, in person at the Customer Service and Payment Center during business hours, and at participating local bank branches during July and December.⁴ You’ll need your 12-digit parcel ID for phone and online payments, and the original tax stub for bank branches.

Exemptions and Credits That Reduce Your Bill

Principal Residence Exemption

The Principal Residence Exemption is the biggest routine tax break for Ann Arbor homeowners. It removes the local school operating millage (up to 18 mills) from your bill.⁶ On a home with $200,000 in taxable value, that’s roughly $3,600 in savings a year. You must own and occupy the home as your primary residence. To claim it, file Form 2368, the Principal Residence Exemption Affidavit, with the Ann Arbor Assessor’s Office; the form can be submitted through the city’s assessing portal.⁷ Miss the filing and you lose the exemption for every year you missed; there’s no retroactive fix. It’s the most common and most expensive mistake Ann Arbor homeowners make with their taxes.

Poverty Exemption

Homeowners with low income can apply for a partial or full reduction of their taxable value.⁸ Ann Arbor sets its own income and asset thresholds each year. For 2026, a single-person household earning at or below $15,650 qualifies for a 100-percent exemption, with partial exemptions of 75, 50, or 25 percent available at higher income levels up to $44,100 for one person. A family of four can qualify with income up to $62,950. Total assets other than the home and a primary vehicle cannot exceed $50,000.⁹ Apply to the Board of Review between January 1 and the last day the board is in session, and submit federal and state tax returns with the application.

Disabled Veteran Exemption

Michigan fully exempts the home of a qualifying disabled veteran from property taxes. You qualify if you meet any one of three criteria: a 100-percent permanent and total disability rating from the VA, a VA certificate for specially adapted housing assistance, or a VA rating of individually unemployable.¹⁰ The veteran must have been discharged under honorable conditions and must own and occupy the home as a primary residence. An unremarried surviving spouse keeps the exemption.

Summer Tax Deferment

Homeowners age 62 or older (including the unremarried surviving spouse of someone who was 62 at the time of death), or those with a qualifying disability, whose total household income was $40,000 or less in the prior year, can defer summer taxes until February 15 of the following year without penalty or interest.¹¹ File a deferment application with the City Treasurer by September 15. This doesn’t reduce the tax; it buys about seven extra months.

Michigan Homestead Property Tax Credit

Separately from any local exemption, Michigan offers an income tax credit that refunds part of what you paid. If your property taxes exceed 3.2 percent of household income, you can claim 60 percent of the excess as a credit on your state income tax return.¹² Filers 65 and older use a more generous formula. The credit is available to both homeowners and renters and phases out at higher incomes.

Renovations, Additions, and Uncapping

The Proposal A cap protects you from market-driven increases but not from increases caused by physical changes to your property. When you add a room, finish a basement, or build a garage, half the market value of the improvement is added directly to your taxable value on top of the normal capped calculation for the existing structure.² A $100,000 addition adds roughly $50,000 to your taxable value in the year the assessor records it, which at 55 mills is about $2,750 more per year.

If the city discovers previously unrecorded improvements, it can add the omitted value for the current year and the two preceding years.¹³ Unpermitted work caught during a reassessment or a sale inspection can trigger a back-dated increase.

Your Assessment Notice and How to Appeal

Each year in late February the city mails a Notice of Assessment (Form L-4035) showing your updated assessed value, SEV, and taxable value for the coming year. Every parcel has a unique 12-digit ID that appears on the notice and prior bills, and you can look up the specific millages levied against your parcel through the city’s online assessment portal.¹⁴ The taxable value line is the one that drives your bill and the one you’d challenge on appeal.

March Board of Review

If you believe your assessment is too high, start with the Ann Arbor Board of Review, which meets during the third week of March.¹⁴ Schedule an appointment during the meeting window and submit a petition with supporting evidence: comparable sales, an independent appraisal, or documentation of property defects the assessor may not know about. The board mails decisions within a few weeks after adjourning. For residential property, appearing before the Board of Review is required before you can move on.

Michigan Tax Tribunal

If the Board of Review doesn’t rule in your favor, you can appeal to the Michigan Tax Tribunal. For residential property, the filing deadline is July 31 of the same year. Commercial and industrial owners have a May 31 deadline and can file directly with the Tribunal without going through the local board first.¹⁴ Missing the March Board of Review effectively closes the door on a residential Tribunal appeal for that year.

What Happens If You Don’t Pay

Unpaid Ann Arbor property taxes follow a three-year path to foreclosure. After taxes go delinquent on March 1, they’re collected by the Washtenaw County Treasurer with escalating penalties and interest. In the second year of delinquency, the property is forfeited to the county. If the taxes remain unpaid through March 31 of the third year, the county forecloses and takes title.¹⁵ Michigan’s timeline is shorter than many states, and the penalties stack quickly enough that a single missed year can turn into a real threat to the home. If you’re struggling to pay, look at the poverty exemption, senior deferment, and payment options through the county before the debt grows.

1
City of Ann Arbor. Property Taxes
2
Michigan Legislature. MCL 211.27a – Property Tax Assessment; Determining Taxable Value
3
Michigan Legislature. MCL 211.27 – True Cash Value Defined
4
City of Ann Arbor. Treasury
5
State of Michigan. Frequently Asked Questions
6
State of Michigan. Principal Residence Exemption Background
7
City of Ann Arbor. Assessing Online Forms and Submissions
8
Michigan Legislature. MCL 211.7u – Exemption of Principal Residence of Persons in Poverty
9
City of Ann Arbor. 2026 Poverty Exemption Application
10
Michigan Legislature. MCL 211.7b – Exemption of Real Property Used and Owned as Homestead by Disabled Veteran or Surviving Spouse
11
Michigan Legislature. MCL 211.51 – Summer Property Tax Deferment
12
Michigan Legislature. MCL 206.522 – Homestead Property Tax Credit Calculation
13
Michigan Legislature. MCL 211.34d – Omitted Real Property
14
City of Ann Arbor. Assessing
15
State of Michigan. Property Tax Forfeiture and Foreclosure