A home on Walloon Lake that changes hands this fall will have its taxable value uncapped next year, the same way sales have worked since Proposal A. The repeal that made headlines in May hasn't changed that. House Bill 5872 passed the Michigan House 57 to 46 on May 20, 2026. It was referred to the Senate on June 2 and hasn't moved since.
Even if it did pass, the bill as written would not reach a closing this fall. And for a buyer taking over a long-held lake property as a second home, the pop-up is only half of the jump. The other half is an 18-mill gap that applies to whatever taxable value the property resets to.
Where the repeal actually stands in October 2026
The legislative record, in order:
- May 20, 2026. The House passed an eight-bill property tax package. As the Michigan Municipal League summarized it, the package covered "eliminating the uncapping (pop-up tax) for all property upon sale," repealing the State Education Tax and the state real estate transfer tax, and ending personal property taxes.
- The same day. The League reported that the bills went through "a six-minute committee hearing" with no testimony, then passed the House just over eight hours later.
- June 2, 2026. HB 5872 through HB 5879 went to the Senate Government Operations Committee. The committee's bill record shows the referral and nothing after it, even though the same page logs activity on other bills as late as October 1.
- Still pending. The services tax meant to replace the lost revenue, HB 5880, was introduced and referred to a House committee and never got a vote. MLive reported that it hadn't moved and that the other bills in the package were tied to it.
- November 3, 2026. No property tax question is on the statewide ballot. Michigan Public reported on September 4 that the final ballot has two statewide questions: a constitutional convention and limits on political donations from some utilities and government contractors.
In February, Governor Whitmer said she was open to negotiating a services tax to pay for property tax and utility rate cuts, and that her support would depend on the details, WKAR reported. Those details have not passed either chamber.
The date written into the bill
The House Fiscal Agency analysis of HB 5872 says the change would apply "beginning December 31, 2026." From that date, a conveyance of title would no longer count as a transfer of ownership for uncapping.
A closing in October, November, or most of December falls before that date. Under the bill as written, those sales would uncap even if the Senate passed it unchanged tomorrow. The Senate could change the date, but nothing it has done so far points either way.
How the pop-up works on a property nobody has sold in years
Michigan taxes property on its taxable value, not its market value. The Charlevoix County Equalization FAQ explains that taxable value is the lower of the state equalized value or the capped value, and that millage rates are applied to taxable value. SEV is set at half of market value.
While one owner holds the property, the capped value can only grow by the lesser of inflation or 5% a year. When ownership transfers, Michigan Treasury says taxable value uncaps in the calendar year after the transfer. The county FAQ adds that the new taxable value equals SEV, and the annual cap starts again from there.
Here are the multipliers that limited a capped value's growth in recent years, from the State Tax Commission's multiplier archive:
| Tax year | Inflation rate multiplier |
|---|---|
| 2020 | 1.019 |
| 2021 | 1.014 |
| 2022 | 1.033 |
| 2023 | 1.05, capped; inflation measured 1.079 |
| 2024 | 1.05, capped; inflation measured 1.051 |
| 2025 | 1.031 |
| 2026 | 1.027 |
Multiplied together, those seven years let a capped value grow about 25%, assuming no additions or losses to the property. If a lake home's market value rose faster than that, the difference built up in SEV while taxable value stayed behind. The cap was hit in 2023 and 2024. In both years inflation ran above 5%, and the extra growth was never added to taxable value. The Citizens Research Council of Michigan calls the gap between SEV and taxable value a reservoir of untaxed value, and a transfer of ownership is what releases it.
So the seller's current tax bill measures how long the seller has owned the house. It says very little about what the next owner will pay.
The second half of the jump: 18 mills
The other part has nothing to do with the sale. A principal residence exemption removes local school operating millage of up to 18 mills, according to Michigan Treasury. A home used as a second home does not qualify, so the full rate applies.
Around Walloon Lake, the state's 2025 total rates report shows the split exactly. One mill is $1 per $1,000 of taxable value.
| 2025 total rate | With principal residence exemption | Without exemption |
|---|---|---|
| Melrose Township, Boyne City schools | 25.6891 mills | 43.6891 mills |
| Melrose Township, Public Schools of Petoskey | 24.6905 mills | 42.6905 mills |
| Bear Creek Township, Public Schools of Petoskey | 24.3464 mills | 42.3464 mills |
To see how the two pieces combine, take a hypothetical Melrose Township home in the Boyne City school district with an SEV of $500,000. Suppose the longtime owner, who lives there full time, has a capped taxable value of $250,000. At 2025 rates, that owner's millage comes to about $6,422 a year. If a buyer uses it as a second home, taxable value uncaps to $500,000 and the non-exempt rate applies, which works out to about $21,845. Of the roughly $15,400 increase, about $6,422 comes from the pop-up alone, and the other $9,000 is the 18 mills on the new $500,000 base. These numbers are made up to show the mechanism. They are not an estimate for any real parcel, and actual rates and values change every year.
The two effects multiply each other. The 18 mills apply to the uncapped value, so the larger the gap the seller built up, the more those 18 mills cost.
Why the size of the jump differs from lake to lake
The fiscal agency's analysis says the bill's impact would vary widely by geography because the ratio of SEV to taxable value varies so much from place to place. Its statewide estimate is a revenue loss of $200 million to $250 million in the first year, growing past $2 billion by fiscal year 2035 as each year's sales would carry their capped values forward. The League described the pop-up as "the single mechanism that allows long-held parcels, many capped well below market, to rejoin the active tax base."
Emmet County's equalization page posts its 2025 and 2026 annual equalization reports. For a single house, though, the useful comparison is parcel by parcel. Charlevoix County's online services show 2026 SEV and taxable value for individual parcels, and those two numbers side by side show how much has built up on a particular house.
The 45-day form that tells the assessor
The transfer itself triggers the uncapping. The affidavit is how the assessor is told about it. Treasury Form 2766, the Property Transfer Affidavit, says the new owner must file it with the city or township assessor within 45 days of the transfer. According to the form, filing late or not filing can bring:
- retroactive additional taxes, plus interest and penalties
- a penalty of $5 per day, up to $200, for an owner-occupied principal residence
- a cap of $4,000 on that daily penalty for other real property, which includes a second home
The inflation multiplier for 2027 does not yet appear in the State Tax Commission's archive. The 2026 bulletin was dated November 18, 2025. Once published, the 2027 figure will set how fast the new owner's taxable value can grow once it is uncapped.
Short answers
Did Michigan get rid of the pop-up tax? No. As of early October 2026, HB 5872 has passed the House and is sitting in Senate Government Operations with no further action recorded.
If it passes later, does it reach back to a sale this fall? The fiscal agency describes the change as beginning December 31, 2026. A sale that closes before that date is outside the bill as written.
When does a fall 2026 buyer's taxable value change? In the calendar year after the transfer, which for this fall's closings is 2027.
Does the transfer tax repeal affect this? That repeal is a separate bill, HB 5874. It is in the same Senate committee with the same lack of action, and it does not change how taxable value uncaps.
If you are weighing a Walloon Lake property where the seller's tax bill looks low, the team at Pat O'Brien & Associates can pull the parcel's SEV and taxable value with you and go through how the uncapping works on that house before you write an offer. Contact Us.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
