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Michigan Farm Bureau Family of Companies
 

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Property Taxes

Protection From the Pop-Up Tax

Michigan Public Act 260 of 2000 shields qualified farm property from substantial increases in property taxes or “pop-up taxes” when farmland is transferred, thus helping farms remain in agriculture. 

Without this act, when agricultural land transferred by sale or inheritance the land assessment typically rose significantly as a reflection of the property’s potential development rather than agricultural value. The increase in property taxes made it difficult for farmers, particularly young farmers, to keep land in agriculture.

Public Act 260 

PA 260 protects the taxable value on farmland from rising to the State Equalized Value (SEV) when farm property is transferred, so long as the land remains an agricultural use. 

Currently, annual assessment increases on each parcel of property (adjusted for additions and losses) are limited to the lesser of 5 percent or the rate of inflation. When property is transferred, the assessed value reverts to 50 percent of the SEV. 

Taxable Value and SEV

Each parcel has two values: the taxable value, which reflects the parcel’s capped value and is the basis upon which taxes are levied; and the SEV, which is the true cash value. 

So in an area where the value of property rises faster than the rate of inflation or 5 percent per year, a parcel’s taxable value will be lower than its SEV, and this discrepancy will grow larger each year. 

When the property is transferred, the new owner must pay taxes based upon the property’s SEV unless the property qualifies for protection from the pop-up. At this point, the taxable value is again capped at the rate of inflation or 5 percent. 

Frequently Asked Questions

Farmland Preservation Tax Credits 

Michigan’s Farmland and Open Space Preservation program (PA 116) preserves farmland and open spaces and offers tax relief to farmers who voluntarily participate in temporary farmland preservation agreements. Visit our Farmland Preservation page to learn more.

Accountants

Jeff Bushey, Nietzke & Faupel PC
Pigeon, MI
989-453-3122, [email protected]

Mike Pattwell, Clark Hill 
517-318-3042, [email protected] 

Zachary Larsen, Clark Hill
517-318-3053, [email protected]

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