Detroit is among the U.S. cities with the lowest housing prices, yet it paradoxically has some of the highest effective property tax rates in the country.

The average effective tax rate in Michigan is around 1.3% to 1.5%, but within Wayne County, the city of Detroit has particularly high millage rates. Even with the Principal Residence Exemption, reports indicate that effective tax rates can rise to around 3%.

The median home price in Detroit is quite low, estimated at about $80,000 to $90,000 as of 2025. Applying an effective tax rate of 3% to this price range results in annual property taxes of approximately $2,400 to $2,700. While this absolute amount isn't large, the burden relative to home prices is significant, which is a characteristic of Detroit's property taxes.

Home insurance premiums typically range from $1,800 to $2,300 annually, reflecting the strong winds and winter freeze risks common in the Great Lakes region, as well as the high proportion of older homes. Areas with a history of fire insurance claims may see even higher premiums.

Considering that a significant portion of Detroit's housing stock is nearly 70 to 100 years old, it seems realistic to set maintenance costs at around 2% of the home price. For an $85,000 home, this would be about $1,700 per year, but properties needing complete plumbing or roof replacements could incur much higher costs.

When combining these three items, the total annual cost of homeownership is around $6,000 to $7,000. While this absolute amount is lower than in other major cities, the burden relative to home prices is not insignificant.

Even within Wayne County, nearby suburban areas like Grosse Pointe and Novi may have similar or slightly lower nominal tax rates, but with much higher home prices, the absolute tax burden is often greater than in Detroit.

Michigan automatically applies the Principal Residence Exemption to owner-occupied homes, but if the application paperwork is not submitted on time, additional taxes may be assessed on the school district tax portion. It is advisable to confirm this with the county assessor's office shortly after closing.