Michigan Property Taxes
Taxes in Advance — What It Means at Closing
When a seller has already paid a tax bill that covers days beyond the closing date, those prepaid days belong to the buyer — and the buyer reimburses the seller at closing. Here's how taxes paid in advance work and what the credit looks like on your settlement statement.
The Michigan Two-Bill System
Michigan Bills Property Taxes Twice a Year
Michigan property owners receive two separate tax bills each year — a summer bill and a winter bill. Each bill covers its own fiscal period. When a seller pays a bill before closing and that bill covers days the buyer will own the home, the buyer reimburses the seller at closing for those prepaid days.
Summer tax (city)
- Covers
- July 1 – June 30
- Billed
- July 1
- Due
- September 14
The summer bill covers city taxes for the fiscal year running July 1 through June 30. It is billed July 1 and due September 14. A seller who has paid this bill before closing has prepaid taxes for the days remaining in that fiscal year after closing.
Winter tax (county/school)
- Covers
- December 1 – November 30
- Billed
- December 1
- Due
- February 14
The winter bill covers county and school taxes for the fiscal year running December 1 through November 30. It is billed December 1 and due February 14. A seller who pays this bill before closing has prepaid taxes for the days remaining in that fiscal year after closing.
When Taxes Are Paid In Advance
The Buyer Reimburses the Seller at Closing
Taxes in advance means the seller has already paid a tax bill that covers a period extending beyond the closing date. Because the buyer will own the home for those remaining days, the buyer reimburses the seller at closing for exactly that portion.
At closing, the seller receives a credit — one day at a time — for every day from the day after closing through the end of that bill's fiscal year. The buyer is debited that same amount. This way, each party pays only for the days they actually own the property.
The credit is calculated day-by-day using the total bill amount divided by the number of days in that bill's fiscal year. The seller's credit equals the per-diem rate multiplied by the number of days remaining after closing.
Proration Calculator
Michigan Tax Proration Calculator
Enter your two Michigan tax bills and your closing date. Both bills are assumed paid in advance. The calculator shows the seller credit for each bill — the amount the buyer reimburses at closing.
Summer bill (city taxes) — fiscal year July 1 through June 30.
Winter bill (county/school taxes) — fiscal year December 1 through November 30.
Your Proration
Seller credit · $6.58/day · 203 buyer days
Seller credit · $4.93/day · 356 buyer days
Buyer reimburses seller for prepaid taxes
The summer (city) tax is paid — it covers July 1 – June 30. The buyer owns the home for 203 days after closing (December 9 – June 30). The buyer reimburses you $1,334.79 at closing ($6.58/day × 203 days).
The winter (county/school) tax is paid — it covers December 1 – November 30. The buyer owns the home for 356 days after closing (December 9 – November 30). The buyer reimburses you $1,755.62 at closing ($4.93/day × 356 days).
This calculator is an estimate for planning purposes. The summer bill is prorated over its July 1 – June 30 fiscal year; the winter bill over its December 1 – November 30 fiscal year. Your final proration is computed by the closing agent from the actual tax bills at closing.
Save your worksheet
Common questions
- What does tax proration mean at closing?
- Tax proration is the day-by-day split of the property taxes between buyer and seller at closing. Each bill is prorated over its own fiscal year. The seller is responsible for taxes through the closing date; the buyer is responsible for everything after.
- How does the credit show up at closing?
- When taxes are paid in advance, the seller receives a credit at closing for the days the buyer will own the home within that bill's fiscal year. The buyer is debited that same amount and effectively reimburses the seller for the prepaid portion.
- Who gets credit for the closing day itself?
- The closing day is counted as the seller's last day. The buyer's credit period begins the day after closing.
- Does every Michigan city split taxes the same way?
- Yes. Municipalities set their own billing dates and millage splits, and some taxes are billed on separate cycles. The figures here use the standard fiscal-year convention and your closing agent computes the final proration from the actual bills.
Questions About Your Closing Numbers?
Our closers review every proration line by line before your closing. Call, stop by one of our Michigan offices, or open title online and we'll walk your figures with you.