The most expensive underwriting mistake in Detroit
The most expensive underwriting mistake in Detroit is using the seller's tax bill.
Proposal A caps annual taxable value growth at inflation or 5%, whichever is lower. For 2026 the State Tax Commission set it at 2.7%. Hold fifteen years and taxable value drifts far below what the place is worth.
Then it sells. Taxable value uncaps and is set equal to assessed value. The trap is timing: that happens the year after the transfer.
Buy in 2026 and your first bill still looks fine. The real one lands in 2027.
That means the average Detroit home would see taxes rise about $1,403 if sold today.
After removing outliers, 1,208 homes would jump over $10,000.
Buying as a rental? Add the loss of the Principal Residence Exemption, up to 18 more mills.
Also, use the Assessor's Estimated Property Tax tool, not the current bill.
P.S. NEZ (Neighborhood Enterprise Zone) Properties get a seperate discount so this math doesn't apply.. feel free to comment/DM if you have a specific parcel that you're curious about.