One thing that catches a lot of families off guard after inheriting a house is the property tax bill.
In Michigan, property taxes are based on a taxable value that’s capped from year to year while you own the home. But when a house changes hands, including through inheritance, that taxable value typically resets to match the home’s actual market value the following year.
That reset is called uncapping, and it can mean a noticeably higher tax bill than what the previous owner was paying, especially if they owned the home for a long time and its value has gone up a lot since then.
There are some exceptions. Transfers between spouses, for example, don’t trigger uncapping. Certain transfers to close family members can also qualify for relief in specific situations. The rules are detailed enough that it’s worth having a tax professional or attorney confirm exactly where your situation falls.
What this really means for you is simple: don’t assume the tax bill will stay the same as it was under the person you inherited from. Ask early, factor the new number into your decision, and build it into your math whether you’re planning to keep the house or sell it.
If you’re weighing whether to keep an inherited home once the real tax number is on the table, I’m happy to help you run those numbers together.
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