Thinking about buying a home in Oakland Township and trying to budget for the property tax bill? You are not alone. Michigan’s terms and formulas can feel confusing at first, especially when you hear that your taxes might jump after closing. In this guide, you will learn how Oakland Township property taxes are calculated, what changes when you buy, the Principal Residence Exemption, and the simple steps to get your exact numbers before you write an offer. Let’s dive in.
How Michigan property taxes work
Assessed vs. taxable vs. market value
- True Cash Value (TCV) is the market value. It is what the property would likely sell for.
- Assessed value (SEV) is set at 50% of TCV.
- Taxable value is what most taxes are based on. Your bill is calculated from this number.
Proposal A and the reset at sale
Under Proposal A, your taxable value can increase each year by the lesser of the inflation rate or 5%. When a property sells, the taxable value typically resets to the assessed value. This reset often causes a step-up in taxes for the new owner compared to what the seller paid. In later years, the taxable value is again capped by inflation or 5% until the next sale.
Mills and the basic formula
Property taxes are expressed in mills. One mill equals $1 per $1,000 of taxable value. The basic calculation is:
- Estimated tax = (Taxable value ÷ 1,000) × total mills
Different authorities levy mills that add up to your total rate. These typically include the county, township, school district, and regional education millages.
What shows up on an Oakland Township tax bill
Your bill usually includes millages from several authorities:
- Oakland County for county operations and countywide levies.
- Oakland Township for township operating, and possibly fire, ambulance, library, or parks.
- School district where the parcel sits. Oakland Township parcels can be in different districts. School-related millages such as operating, sinking fund, and voted debt are often a large share of the bill.
- Oakland Intermediate School District (ISD) or similar regional education millage.
- Special districts like fire authorities, library districts, or road improvement authorities.
- Voter‑approved millages for bonds or operations and millage reductions such as Headlee rollbacks that can change effective rates over time.
- TIF, DDA, or brownfield capture can affect where tax revenue goes in some areas, which changes distribution rather than the millage shown on the bill.
Special assessments and local fees
Special assessments are separate from millage. Some properties carry charges for improvements like roads, sidewalks, sewer or water extensions, or drainage projects. These can appear on the tax roll and may be paid in installments over several years. Always check for assessments on the specific parcel you are buying.
What to expect as a buyer
Expect a taxable‑value reset at purchase
When you buy, your taxable value typically resets to the current assessed value. That means your taxes are often higher than the seller’s most recent bill, especially if the seller benefited from years of capped increases. Plan for this step-up in your budget.
Principal Residence Exemption (PRE)
The PRE is an owner-occupied exemption that removes certain non-homestead taxes. It is not automatic. If you will occupy the home, file the PRE with the Oakland Township Assessor’s Office after closing. Confirm local timing and any documentation requirements with the assessor.
Proration at closing and lender escrow
Purchase agreements commonly prorate property taxes so each party pays their share for the time they owned the home. Make sure your contract states the proration method. Most lenders set up an escrow account for taxes. Ask your lender to base the escrow on the anticipated post-purchase taxable value and current local millages, not just the seller’s bill.
Assessment appeals and timing
If you believe your assessment is too high after purchase, you can appeal. Start with the local Board of Review, then the Michigan Tax Tribunal if needed. Deadlines and documentation vary, and Proposal A rules may limit how much relief you can get on taxable value in the short term.
Simple tax estimate example
Let’s say the market value (TCV) you expect to pay for a home is $400,000. The assessed value (SEV) would be 50% of that, or $200,000. After you buy, your taxable value will typically reset to that $200,000.
- If the total local millage is 35 mills, then: (200,000 ÷ 1,000) × 35 = $7,000 per year.
This is a simplified example. Your total mills and any special assessments depend on the exact parcel.
Buyer checklist before closing
- Request the most recent summer and winter tax bills from the seller.
- Pull the parcel’s tax history and current assessed and taxable values from Oakland County records.
- Confirm whether the seller has a Principal Residence Exemption and plan to file your PRE promptly if you will occupy the home.
- Ask the title company to identify and clear any delinquent taxes or special assessments at closing.
- Ensure your purchase agreement clearly states the tax proration method.
- Confirm your lender’s escrow estimate reflects the likely taxable-value reset and current millages.
Where to find your exact numbers
- Oakland Township Assessor’s Office for PRE forms, assessed and taxable values, and local millage information.
- Oakland County Equalization or Treasurer for parcel-level tax history, bills, millage tables, and delinquent tax status.
- Your property’s School District business office for operating, bond, or sinking fund millages approved by voters.
- Local municipal offices for any special assessments or special district captures.
- County parcel search and GIS mapping to confirm school district boundaries, tax district codes, and special districts.
- Recent tax bills from the seller or title company to see the exact levies and amounts applied to the property.
How TIF and DDA captures work
Some areas use Tax Increment Financing, Downtown Development Authorities, or brownfield authorities. These mechanisms can capture a portion of the tax increment to fund improvements. They usually do not change the millage printed on your bill, but they can affect how revenues are distributed among taxing bodies.
Ready to move forward?
Property taxes in Oakland Township are straightforward once you know how assessed value, taxable value, and millage work together, and when the taxable-value reset kicks in. If you want help estimating your specific bill, coordinating your PRE, and aligning your budget with your lender’s escrow, connect with a local advisor who understands the mechanics and the process. Reach out to Five Star Luxury Realty for clear guidance tailored to your purchase.
FAQs
Will my Oakland Township property taxes go up after I buy?
- Often yes, because the taxable value typically resets to the current assessed value at sale, which can increase the taxable base relative to the seller’s capped value.
What is the Principal Residence Exemption, and how do I get it?
- The PRE is an owner-occupied exemption that removes certain non-homestead taxes, and you must file for it with the Oakland Township Assessor after closing.
How do I estimate my Oakland Township property taxes?
- Use Estimated tax = (Estimated taxable value ÷ 1,000) × total mills, with taxable value usually equal to the assessed value after purchase.
Who pays delinquent property taxes at closing in Oakland County?
- Delinquent taxes are typically paid off from the seller’s proceeds at closing because outstanding tax liens cloud title.
Are special assessments common in Oakland Township?
- They can occur for specific improvements like roads, sidewalks, sewer, or drainage, so always check the parcel’s tax history and county records.
Can I appeal my assessed value if it seems too high?
- Yes, you can appeal to the local Board of Review and then to the Michigan Tax Tribunal, keeping in mind Proposal A limits on taxable value changes.
