Proposal A and the Michigan Property Tax Cap

Yes. Proposal A applies to all property types in Michigan — residential, commercial, industrial, and agricultural. The annual taxable value cap and the uncapping rules on transfer work the same way regardless of property classification. Commercial and industrial properties, however, often have larger gaps between SEV and taxable value because of higher appreciation rates and longer hold periods. This is especially common in fast-appreciating markets — and the 2026 Michigan assessment increases have put Prop A caps squarely back in scope for commercial owners in counties like Wayne County and Oakland County.

The pop-up tax is the difference between what the previous owner paid (based on the capped taxable value) and what the new owner pays (based on the full SEV after uncapping). It is not a separate tax — it's the direct result of the taxable value resetting to the uncapped level the year after a transfer. For example, if a property's capped taxable value was $500,000 and the SEV is $900,000, the new owner's tax base jumps by $400,000 overnight, and multiplying that $400,000 by the local millage rate gives you the annual dollar impact. In high-millage Michigan counties that number can easily run into the tens of thousands per year, which is why factoring the pop-up into acquisition underwriting matters so much. Read our Michigan uncapping guide for a deeper walkthrough of how the reset is applied.

Absolutely. The uncapping itself is a legal mechanism under Proposal A, but the assessed value (SEV) that your taxable value uncaps to is still subject to challenge. If the assessor has overvalued your property — using bad comparables, ignoring vacancy, or misclassifying the property — you have every right to file an appeal with the Michigan Tax Tribunal. Reducing the SEV reduces the value your taxes uncap to, which produces savings in the current year and lowers the baseline from which Proposal A's cap begins running again. That dual effect is why post-purchase appeals are among the most valuable cases we handle. Prop A caps are most often litigated first through the March Michigan Board of Review and then escalated to the Michigan Tax Tribunal process for the full procedure.

The cap remains in place for as long as the same owner holds the property and no transfer of ownership occurs. In practice that means the Proposal A protection can last for decades on long-held commercial and industrial properties, producing an enormous gap between the taxable value and the SEV by the time the property finally changes hands. The cap resets every year according to the lesser of 5% or inflation, so in low-inflation years the gap can widen quickly relative to actual market growth. Once the property transfers, though, the cap snaps off and the new owner starts fresh from the uncapped SEV. For portfolio owners, managing Proposal A across multiple Michigan properties is one of the most impactful levers in their tax strategy.

Proposal A caps the annual growth of your taxable value — it does not cap the millage rate itself. Millage rates are set locally by school districts, counties, cities, townships, and special-purpose authorities, and they can rise through voter-approved operating millages, debt millages, and other ballot measures. That means even if your taxable value is capped, your total tax bill can still grow if the local millage rates increase. The two levers work independently, and the only way to control the value side of the equation is to make sure your SEV accurately reflects true cash value. Read about why commercial property taxes increase for a full breakdown of how millage and value interact.

Every Michigan acquisition should model the post-uncapping tax burden as part of due diligence. Look at the current SEV versus the capped taxable value to estimate the pop-up tax. Then assess whether the SEV is accurate or inflated relative to the purchase price and market conditions. Buyers should also evaluate how any Michigan special acts abatements on the property interact with Proposal A — PA 198 and PA 210 treatments can materially change the post-closing tax picture. Smart buyers budget for the uncapping hit and plan to appeal the assessment immediately after closing to bring the tax base in line with reality. Start with a Free Property Tax Review to see what savings are possible.