Michigan Property Tax Proration at Closing

Why Southeast Michigan treats tax bills as paid in advance, and what that means for the money on your closing statement

In Livingston, Oakland, Washtenaw, Wayne, Macomb, and Genesee counties, property taxes are prorated at closing as if paid in advance, on both the summer and the winter bill. The seller is treated as having already paid forward through a date past closing, so the buyer reimburses the seller for the unused portion. Money moves from buyer to seller. That is also Michigan's statutory default: absent an agreement to the contrary, MCL 211.2 assigns the seller the taxes running from the levy date up to the day title passes, and the buyer everything after. In other parts of the state, including Ingham County and areas to its west, agreements routinely specify the reverse, and there the seller credits the buyer instead. On a mid-cycle closing the difference between the two treatments on the same property can run into the thousands of dollars, which is why the proration clause in your purchase agreement is worth reading before you sign rather than at the closing table.

What proration actually means

Michigan issues two property tax bills a year. The summer bill is levied July 1 and the winter bill is levied December 1. Neither one lines up with a closing date, so at every closing the title company has to divide each bill between the two parties according to who owned the home during the period that bill covers.

Proration is not a negotiation and it is not a fee. It is an accounting split of a bill that has already been set by the assessing jurisdiction. What is open to interpretation is the period each bill is treated as covering, and that single question is what separates the advance convention from the arrears convention.

What each bill is treated as covering

Each bill is treated as prepaying the twelve months running forward from its own levy date. This is not a local invention. It follows from the statutory proration rule, which works from the levy date across a twelve month span:

• The summer bill, levied July 1, is treated as covering July 1 through the following June 30
• The winter bill, levied December 1, is treated as covering December 1 through the following November 30

Read those two lines again, because there is something in them that surprises people. The two windows are not halves of a single year. Each runs a full twelve months from its own levy date, which means they overlap by 212 days. The summer and winter bills are separate levies for different taxing units, not the first and second halves of one annual bill.

A worked example

Take a Brighton Township home with a $260,000 taxable value, meaning a home taxed as if it were worth about $520,000. At the 2025 principal residence rate for that jurisdiction, 19.8570 mills, the annual bill runs about $5,162. Say the summer portion is $3,000 and the closing is October 1.

• The summer bill covers July 1 through June 30, a 365 day window
• The seller owned the home for 92 of those days, July 1 through September 30
• The buyer will own it for the remaining 273 days, October 1 through June 30
• $3,000 x 273 / 365 = $2,243.84 credited from the buyer to the seller

Now the part buyers do not see coming. The winter bill has not been levied yet on October 1, so nothing about it appears on the closing statement. When it arrives on December 1 it covers December 1 through the following November 30, entirely after closing, so the buyer owes all of it. A buyer who closes in early autumn writes a large reimbursement check at closing and then receives a full winter tax bill about eight weeks later.

Shift the same closing to January 15 and the picture inverts. Both bills have been issued and both were paid by the seller, so the buyer reimburses on both at once: 167 unexpired days on the summer bill and 320 on the winter bill. Larger number at the closing table, no tax bill waiting in the mail.

Title companies run the actual figures and their day-count conventions vary slightly, so treat this as the shape of the calculation rather than a quote. The point is that when you close changes how much cash you need at the table and when your first tax bill lands.

Where the advance convention applies, and where it does not

Proration convention is regional, and Michigan is not uniform:

• Paid in advance. The prevailing convention across Livingston, Oakland, Washtenaw, Wayne, Macomb, and Genesee counties. This covers Brighton, South Lyon, Howell, Hartland, Pinckney, Fowlerville, Milford, New Hudson, Northville, Plymouth, Livonia, and the surrounding communities.
• Paid in arrears. Derek encounters this treatment in Ingham County and in areas to its west. There the bill is treated as covering a period already elapsed, so the seller credits the buyer for the days the seller owned the home.
• Calendar year rather than the tax cycle. Some jurisdictions on the arrears side prorate against the calendar year instead of the levy-forward cycle, which produces a third set of numbers again.
• The rest of Michigan, deliberately unmapped. Michigan has 83 counties and hundreds of assessing jurisdictions spread across two peninsulas. This page does not attempt to chart convention across all of them, because no honest page could. Outside the counties named above, treat convention as an open question to be verified locally rather than inferred from geography.

This is a reliable source of confusion for anyone moving into the area from out of state, and for anyone selling here while living somewhere else. Nothing is wrong with the closing statement. The convention is simply different from the one they know.

Model your net proceeds with proration included →

Michigan law sets the default. Your contract can override it.

Explanations of Michigan proration usually stop at "it depends on local custom." That leaves out the part that actually settles the question when nothing else does.

Under Section 2 of the General Property Tax Act, MCL 211.2, in a real estate transaction between private parties and in the absence of an agreement to the contrary, the seller is responsible for the portion of the annual taxes levied during the twelve months immediately preceding, but not including, the day title passes, running from the levy date up to but not including that day. The buyer is responsible for the remainder. That is proration as if paid in advance, set out in statute, and it is where the twelve-months-forward treatment of each levy comes from.

Two things follow. Advance treatment is the fallback anywhere in Michigan when an agreement is silent. And an agreement that says otherwise controls, which is how arrears treatment operates in the places that use it. Custom describes what agreements in a region tend to specify. It is not what the law assumes in their absence.

Derek uses his brokerage's purchase agreement forms rather than a state or association form, and their tax provision is written to remove the ambiguity rather than defer to custom. In substance it does four things:

• Taxes that have become a lien on the property as of the closing date are the seller's responsibility
• Current taxes are prorated as of the closing date on a due-date basis, without regard to lien date, as if paid in advance, with the July levy treated as covering July 1 through the following June 30 and the December levy as covering December 1 through the following November 30
• Taxes falling due after the closing date are the buyer's responsibility, again without regard to lien date
• Current homeowners, subdivision, or condominium association dues and assessments are prorated the same way, and capital or lateral charges and assessments are paid by the seller at closing

That is a paraphrase, not the operative text. Read the tax and proration clause in your own agreement, because form language varies between brokerages and a clause written for an arrears market will produce an arrears result even on a property in Brighton.

Two things that change the number being prorated

Uncapping. Proration divides the current bill. It does not account for the fact that the taxable value uncaps after the sale and the next bill will be calculated on a higher number. Those are separate events and buyers regularly conflate them. See Michigan property tax uncapping explained.

A mid-year exemption change. If the seller's Principal Residence Exemption comes off during the year, or the buyer establishes one after closing, the underlying tax amount can shift by up to 18 mills, which changes what there is to prorate. See the Michigan Principal Residence Exemption explained.

How Derek handles proration on a transaction

Derek Bauer is an Associate Broker and REALTOR® with Real Estate One in Brighton, with 24+ years of full-time experience and 1,100+ closed transactions across Livingston, Oakland, Washtenaw, and Wayne counties. Proration is reviewed on every file, not raised only when someone asks:

• The proration language in the purchase agreement is read against the convention that applies where the property actually sits
• Tax amounts are verified directly with the assessing jurisdiction rather than taken from the listing
• Buyers are told before closing which bills they will reimburse and which bill is coming to them afterward, so the December bill is not a surprise
• Sellers see proration modeled as a line in their net proceeds rather than as a number that shows up at the table

If you are buying, a Buyer Discovery Session is where the carrying cost picture gets built. If you are selling, SellerProceeds.com models proration on the advance convention used in this market.

Frequently Asked Questions

Are Michigan property taxes paid in advance or in arrears?

Michigan's statutory default is advance. Under MCL 211.2, absent an agreement to the contrary, the seller is responsible for taxes from the levy date up to the day title passes and the buyer is responsible for the remainder. Across Livingston, Oakland, Washtenaw, Wayne, Macomb, and Genesee counties both the summer and winter bills are prorated on that advance basis, so the buyer reimburses the seller for the portion of each billing period falling after closing. In Ingham County and areas to its west, agreements routinely specify arrears instead and the seller credits the buyer. Because an agreement overrides the statutory default, the clause in your own contract controls the outcome.

What period does the Michigan summer tax bill cover?

Under the advance convention used in Southeast Michigan, the summer bill levied July 1 is treated as covering July 1 through the following June 30. The winter bill levied December 1 is treated as covering December 1 through the following November 30. These are two separate twelve month windows, not two halves of one year, and they overlap by 212 days.

Who pays the property taxes at a Michigan closing, the buyer or the seller?

In Brighton, South Lyon, Howell, and the rest of Southeast Michigan, taxes already levied are paid by the seller, and the buyer then reimburses the seller for the unused portion of the period each bill covers. Money moves from buyer to seller. Any bill falling due after the closing date is the buyer's responsibility in full.

Why do I owe the seller money for taxes they already paid?

Because in this market each bill is treated as prepaying a period that extends past your closing date. The seller paid for months during which you, not they, will own the home, so you reimburse them for those months. Buyers relocating from an arrears state often expect a credit in the opposite direction. Both conventions are legitimate and the difference is regional, not a mistake on the settlement statement.

How much is property tax proration at a Michigan closing?

It depends on the bill amount and the closing date. On a $3,000 summer bill with an October 1 closing, the buyer reimburses the seller for 273 of the 365 days in the covered period, which works out to roughly $2,244. Close in mid January instead and the buyer reimburses on both the summer and winter bills at the same closing. Your title company produces the binding figures.

Does proration account for property tax uncapping?

No, and this catches buyers regularly. Proration divides the tax bill as it exists at closing. Uncapping resets the taxable value after the sale, so the following year's bill is calculated on a higher figure. They are separate events, and a proration figure at closing tells you nothing about what your bill will be once the property uncaps.

Can the summer and winter bills be prorated differently on the same property?

Yes. Proration convention is set locally rather than statewide, and it does not always apply uniformly to both bills. Some municipalities treat the summer bill as paid in advance and the winter bill as paid in arrears, or the reverse, within the same jurisdiction and at the same closing. Southeast Michigan is predominantly an advance market, but that is a general pattern rather than a rule, and exceptions exist. Confirm with the city or township treasurer for the specific property how each bill is prorated, and have your title company verify it before closing.

Are HOA dues and special assessments prorated too?

Current homeowners, subdivision, and condominium association dues and assessments are prorated on the same due-date basis as property taxes. Capital and lateral charges and assessments are handled differently and are paid by the seller at closing. Road, sewer, and drain district special assessments sit outside the millage stack entirely, do not appear in the Treasury estimator, and should be checked through a special assessment search before closing.

Related Resources

• Michigan Property Tax Estimator
• Michigan Property Tax Uncapping Explained
• Michigan Principal Residence Exemption
• Livingston County Property Tax Rates and Millage
• Home Buyer Guide
• Michigan Net Proceeds Calculator

Connect With Derek

Whether you are reviewing a proration clause before you sign, trying to understand a closing statement in front of you, or planning a sale and want the tax line modeled honestly, Derek welcomes a direct, no-pressure conversation.

Derek Bauer

Associate Broker, REALTOR® | Real Estate One

Certified Residential Specialist (CRS) | RealTrends Verified Top 250 Michigan Agent (2025)

565 E. Grand River Ave., Brighton, MI 48116

734-678-4745

[email protected]

Broker compensation is not set by law and is fully negotiable. All compensation is determined through negotiation between the parties. The information on this page is provided for general informational purposes only and does not constitute professional real estate, legal, financial, or tax advice. Proration custom and purchase agreement language vary by jurisdiction and by brokerage, and the purchase agreement governs any specific transaction. Proration convention is set at the local level and is not uniform statewide; some municipalities apply different conventions to the summer and winter bills on the same property. Verify with the city or township treasurer for the specific property, and with your title company, how each bill is prorated before relying on any figure. The contract summary on this page is a paraphrase for general explanation only and is not the operative text of any agreement. Consult your title company and real estate attorney on specific transactions. Proration figures shown are illustrative; your title company produces the binding calculation. Millage figures cited are 2025 rates published by the Michigan Department of Treasury, Property Services Division, and do not include the 1% property tax administration fee. Net proceeds estimates referenced on this page are produced by SellerProceeds.com and are based solely on user-entered assumptions. Past performance is not a guarantee of future results. Individual transaction outcomes vary. Derek Bauer is a licensed Michigan Associate Broker (License #6506038159) operating under Real Estate One, 565 E. Grand River Ave., Brighton, MI 48116. Equal Housing Opportunity.