If you own a home in Farmington Hills Michigan, there is a very good chance you are sitting on significantly more equity than you realize — and paying significantly less in property taxes than your neighbor who bought their home more recently. This is not a mistake. It is by design. And it is one of the most important and least understood aspects of homeownership in Michigan.

Michigan's Proposal A — passed by voters in 1994 — created a system that caps how fast your property tax bill can grow each year you own your home. The result is a growing gap between what your home is actually worth in today's market and what you are being taxed on. For long-term Farmington Hills homeowners that gap can be enormous.

As a RE/MAX Classic Realtor with 24 years of experience and 700+ transactions across Oakland County Michigan, this comes up in almost every conversation I have with Farmington Hills homeowners. This guide explains exactly how Proposal A works, what it means for your tax bill and your equity, and what every Farmington Hills homeowner needs to understand before making any decision about their home in 2026.

Key Takeaways — Michigan Proposal A and Farmington Hills Home Values

What Is Michigan Proposal A and How Does It Work?

On March 15 1994 Michigan voters approved a constitutional amendment known as Proposal A. Before Proposal A property taxes in Michigan were based on the State Equalized Value (SEV) — essentially 50% of your home's estimated market value. This meant that as home values rose your tax bill could rise right along with them creating hardship for long-term homeowners on fixed incomes.

Proposal A changed everything. It created a new term called Taxable Value (TV) and made that the basis for calculating property taxes instead of the SEV. Under Proposal A the annual increase in your taxable value is capped at whichever is lower — 5% or the rate of inflation as measured by the Consumer Price Index.

For 2026 the Michigan State Tax Commission has confirmed the inflation rate multiplier at 1.027 — meaning taxable values can increase by no more than 2.7% in 2026 regardless of how much the actual market value of your home has grown. This is a significant drop from the 5% caps seen in 2024 and 2025 and is good news for Farmington Hills homeowners this year.

The Three Values on Your Farmington Hills Assessment Notice — Explained

Every February the City of Farmington Hills mails a Notice of Assessment to every property owner. This notice contains three different values that confuse many homeowners. Here is exactly what each one means.

The most important thing to understand is that only your taxable value determines your property tax bill. And thanks to Proposal A your taxable value grows much more slowly than your home's actual market value — especially if you have owned your Farmington Hills home for a decade or more. According to Michigan property tax experts, this dual system creates significant disparities between neighbors and can deliver real sticker shock to new buyers who get uncapped at purchase.

The Gap in Farmington Hills — Real Numbers in Spring 2026

Here is where this gets very real for Farmington Hills homeowners. In Spring 2026 the average home value in Farmington Hills is $385,085 — up 2.3% year over year. Yet many long-term homeowners have taxable values that are a fraction of that market value.

Consider a homeowner who purchased their Farmington Hills home in 2000 for $200,000. Their taxable value at that time was approximately $100,000. Over 26 years of Proposal A caps — even at the maximum 5% per year — their taxable value would have grown to approximately $350,000. But with actual caps averaging much lower many long-term owners have taxable values well below that number. Meanwhile their home's actual market value in Spring 2026 might be $400,000 to $500,000 or more.

What Happens When You Sell — The Uncapping Explained

Here is the part that surprises most Farmington Hills homeowners and has critical implications for anyone thinking about selling their home in Spring 2026.

When ownership of a property is transferred in Michigan — whether through a sale, gift, or other transfer — the taxable value is uncapped. According to Michigan Compiled Laws MCL 211.27a(3), in the year following the transfer of ownership the taxable value resets to equal the assessed value (SEV) — which is approximately 50% of the current market value. From that point the new owner's taxable value starts being capped again under Proposal A.

What this means in practical terms for a Farmington Hills buyer in Spring 2026 is significant. If a home sells for $400,000 the new buyer's taxable value in the following year will jump to approximately $200,000 — the assessed value at 50% of market value. If the previous owner had a taxable value of $140,000 the new buyer's annual tax bill could increase by thousands of dollars compared to what the seller was paying.

This is not a penalty. It is simply how Proposal A works. But it is something that every Farmington Hills buyer needs to understand before making an offer — and every seller needs to be prepared to discuss with prospective buyers. Explore our complete Oakland County home seller's guide for more on what buyers and sellers need to know in today's market.

How This Affects Your Decision to Sell in Spring 2026

Understanding the relationship between your taxable value and your actual market value is essential to making smart decisions about whether and when to sell your Farmington Hills home.

If you are a long-term homeowner with a low taxable value the gap between what you are being taxed on and what your home is worth represents real equity that you have built. When you sell you convert that equity into cash proceeds. The question is whether Spring 2026 is the right time to make that move — and the data suggests it very well may be.

Farmington Hills homes are averaging $385,085 in market value — up 2.3% year over year. Well-priced homes are going under contract in as few as 6 days. The sale to list ratio is 97.6%. Buyer demand is strong and inventory is tight. If you have been thinking about selling your Farmington Hills home and moving to a smaller home, a waterfront community, or relocating out of state this spring window represents one of the best opportunities to maximize your net proceeds in years.

However it is equally important to understand what you will be buying into if you purchase another home in Oakland County. Your taxable value will reset on your new purchase and you will start the Proposal A clock over again. Understanding the full financial picture — including what your new property taxes will look like after uncapping — is something I walk every client through before they make any decisions. Visit our Farmington Hills homes for sale page to see what is currently available in your market.

How to Find Out Your Farmington Hills Taxable Value vs Market Value

Finding out exactly where you stand on the taxable value vs market value gap in Farmington Hills is straightforward. Here are the steps to get a complete picture.

Step 1. Locate your most recent Notice of Assessment mailed to you in February 2026 by the City of Farmington Hills. This document shows your current assessed value (SEV) and taxable value. If you cannot find the notice you can look up your property information online through the City of Farmington Hills Assessing Department.

Step 2. Note your taxable value from the notice. Then multiply your SEV by two to get the assessor's estimate of your market value. This gives you a baseline sense of the gap.

Step 3. Get a free professional Comparative Market Analysis (CMA) from a local Realtor who knows the Farmington Hills market. The assessor's estimate of market value is based on mass appraisal techniques and a sales study that covers a 24-month period ending December 31 2025. A professional CMA uses current live MLS data from the past 90 days and accounts for your specific home's condition, updates, and features — giving you a far more accurate picture of what your home would actually sell for in today's Spring 2026 market.

Step 4. If you believe your assessed value is too high you have the right to appeal. The Michigan Tax Tribunal appeal deadline for 2026 assessments is June 1 2026. Acting quickly is essential. Learn more about the benefits of working with a local Oakland County Realtor when navigating these decisions.

Frequently Asked Questions — Michigan Proposal A and Farmington Hills Home Values

-->