HB 5872 Michigan House · 2025-2026 Regular Session

Property tax: assessments; taxable value of transferred property; modify. Amends sec. 27a of 1893 PA 206 (MCL 211.27a).

This bill modifies Michigan's property tax rules to clarify how taxable values are calculated when property ownership transfers. It establishes that a property's taxable value resets to its current market value upon transfer, but then limits future annual increases to the lesser of 5% or the inflation rate until another transfer occurs. The legislation also defines specific scenarios where a transfer does not trigger a reset, such as when property is moved into a trust by a parent for their own children or grandchildren, provided the home remains residential. Additionally, it allows local tax officials to correct past valuation errors related to missed transfers for up to three years and clarifies rules for land contracts and certain bond-funded properties.

Issues: ✓ Budget & Taxes

Bill status passed both 4 of 5 stages cleared

Introduction

Apr 2026

Committee Review

Jun 2026

House Passage

May 2026

Senate Passage

Jun 2026

Governor

Introduced Apr 22, 2026 Last action Jun 2, 2026

Maddy AI version diff · 2 comparisons

What changed between versions

As Passed by the House → Substitute (H-2) · 3 edits

MINOR

The bill text was updated to reflect its status as a substitute version (H-2) after being passed by the House. The substantive policy language, including the property tax assessment rate, remains unchanged. The primary differences are technical formatting adjustments and the replacement of internal tracking codes used by the legislature.

TECHNICAL

The header was updated to indicate this is a 'Substitute' version of the bill rather than the original 'As Passed' version.

Internal tracking identifiers at the bottom of the page were replaced with new codes, likely reflecting the bill's progression through the legislative process.

Minor formatting adjustments were made to the spacing and alignment of the title and enactment clause.

House Introduced Bill → As Passed by the House · 6 edits · May 20, 2026

MODERATE

This bill amends Michigan's property tax law to clarify when a property ownership transfer triggers a full reassessment (known as 'recapture'). The primary change is the addition of numerous specific exceptions where a transfer will NOT trigger a full reassessment, particularly for transfers between family members, certain trust distributions, and transfers involving conservation easements. It also updates the definition of 'transfer of ownership' to explicitly include leases over 35 years and changes in corporate ownership structures.

Scope change

The scope of the bill expands by adding specific scenarios that are exempt from the standard property tax recapture rules, thereby narrowing the situations in which a property owner faces a sudden increase in taxable value upon selling or transferring property.

ELIGIBILITY

Added a new exception for transfers of residential real property to close relatives (parents, siblings, children, grandchildren) if the property is not used for commercial purposes, preventing a tax hike in these family transfers.

Added an exception for transfers of land subject to conservation easements or those eligible for federal conservation tax deductions, ensuring these environmentally protected lands do not trigger recapture.

Modified the rules for trust transfers and distributions to provide clearer exemptions for property moving between spouses or to specific family members, reducing uncertainty for estate planning.

DEFINITION

Expanded the definition of 'transfer of ownership' to include long-term leases (over 35 years) and changes in corporate ownership (over 50%), clarifying when these business arrangements count as a sale for tax purposes.

REQUIREMENT

Added new notification requirements for corporate entities and legal owners to inform the tax assessor within 45 days of significant ownership changes, improving the tracking of property transfers.

ENFORCEMENT

Introduced specific penalties, including a $200 fine, for beneficiaries or transferees who fail to provide proof of family relationship or commercial use when required by the new exceptions.

Floor votes · House May 20, 2026

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Jun 2, 2026

Committee

REFERRED TO COMMITTEE ON GOVERNMENT OPERATIONS

upper

Jun 2, 2026

Upper · Passed

PASSED BY HOUSE WITH IMMEDIATE EFFECT

upper

May 20, 2026

Lower · Passed

passed; given immediate effect Roll Call #162 Yeas 57 Nays 46 Excused 0 Not Voting 7

lower

May 20, 2026

Lower · Passed

substitute (H-2) adopted

lower

May 20, 2026

Committee

referred to second reading

lower

May 20, 2026

Lower · Passed

reported with recommendation with substitute (H-2)

lower

Apr 22, 2026

Committee

referred to Committee on Government Operations

lower

Apr 22, 2026

Introduced

introduced by Representative Rep. Ann Bollin

lower

1 primary · 29 co-sponsors