Starting in 1995, your property taxes were calculated on the taxable value and the increase is calculated using the prior year taxable value multiplied by the CPI or 5% whichever is lower. Unless there was a transfer of ownership then the assessed value becomes the taxable value. Any additions or losses to the property can affect the taxable value.

The calculation of the Inflation Rate Multiplier is set in statute in MCL 211.34d: (l) "Inflation rate" means the ratio of the general price level for the state fiscal year ending in the calendar year immediately preceding the current year divided by the general price level for the state fiscal year ending in the calendar year before the year immediately preceding the current year. (f) "General price level" means the annual average of the 12 monthly values for the United States consumer price index for all urban consumers as defined and officially reported by the United States department of labor, bureau of labor statistics.

To review how the current year CPI is calculated, please click here.