Property Taxes on New Construction in Livingston County MI: What Custom Home Buyers Should Expect

One of the most common surprises for custom home buyers in Livingston County, Michigan, comes after the house is finished: the property tax bill. If you are moving from an older home or a different part of the state, the way new construction is assessed can look very different from what you are used to. Understanding how property taxes work on a new custom home — before you build — helps you budget accurately and avoid surprises. Here is what every buyer at communities like Oaks of Tyrone in Tyrone Township should know.

How new construction is assessed differently than existing homes

Michigan's Proposal A, passed in 1994, capped annual taxable value increases on existing homes at the rate of inflation or 5%, whichever is lower. This means if you have owned a home for years, your taxable value may be significantly lower than its market value. The system was designed to protect long-term homeowners from being priced out by rising property values.

New construction does not get that benefit — at least not in the first year. When you build a new custom home, the local assessor establishes its assessed value at 50% of what the property is worth (its "true cash value") as of December 31 of the year construction is completed. In the first year, the taxable value equals the assessed value. There is no cap. Your tax bill reflects the full market value of your new home from day one.

This is the single most important thing to understand: on an existing home you might be paying taxes on a taxable value that is 30, 40, or even 50% below market value. On a new construction home, you pay taxes on 100% of the assessed value from the start. After the first year, the taxable value increase is capped under Proposal A, just like any other home, but that first-year assessment sets the baseline for everything that follows.

What millage rates apply in Tyrone Township and Livingston County?

Property taxes in Michigan are calculated by multiplying your property's taxable value by the total millage rate for your area. A mill is one dollar per $1,000 of taxable value. In Livingston County, millage rates vary by township and school district. For a home at Oaks of Tyrone in Tyrone Township, served by Hartland Consolidated Schools, the total millage rate includes:

• Livingston County operating mills — the 2026 county tax rate is $7.18 per $1,000 of assessed value, up 3.68% from 2025, but still the lowest in the GLOW region (Genesee, Livingston, Oakland, Washtenaw counties).
• Tyrone Township mills — township-level operating and special assessment mills.
• Hartland Consolidated Schools mills — the school district millage, which typically represents the largest portion of your total property tax bill.
• Other special millages — library, parks, and other voter-approved millages that apply countywide or within the township.

Total millage rates for properties in Tyrone Township within Hartland Schools typically range from 42 to 48 mills, depending on current voter-approved initiatives. For a rough estimate, you can calculate your annual property taxes by multiplying your home's estimated market value by 50% (to get assessed value), then dividing by 1,000 and multiplying by the total millage rate. On a custom home valued at $650,000 in Tyrone Township, that works out to approximately $6,800 to $7,800 per year, or $570 to $650 per month.

For comparison, Livingston County has one of the lowest median effective property tax rates in Southeast Michigan — roughly 0.50% of market value — making it more affordable than many neighboring counties while still offering well-funded public schools and municipal services.

How the assessment timeline works for new construction

Understanding the timing of property tax assessment for a new build helps avoid surprises in your first year of ownership. Here is how the timeline typically works in Livingston County:

• Construction year — while your home is under construction, the land is assessed at its vacant lot value. You pay taxes only on the land during this period.
• December 31 assessment date — once construction is substantially complete, the township assessor values the property (land plus improvements) as of December 31. This sets the assessed value for the following tax year.
• Summer tax bill (due July 1) — covers half of the annual tax. Typically based on the prior year's assessed value.
• Winter tax bill (due December 1) — covers the remaining half. Again based on the prior year's assessed value.
• Year two and beyond — taxable value increases are capped at the lower of CPI or 5%, consistent with Proposal A.

The key takeaway: if your custom home is completed mid-year, you may see a partial-year assessment in your first tax cycle, followed by the full assessment in the next cycle. Your builder and real estate agent can help you understand exactly when your property will be reassessed and what to expect on your first tax bills.

Principal residence exemption — don't forget to file

If you plan to live in your new custom home as your primary residence, you are eligible for the Principal Residence Exemption (PRE) in Michigan. This exemption removes up to 18 mills from the school operating portion of your property taxes — a significant savings that can reduce your annual tax bill by $2,000 or more on a custom home.

The PRE form (form 2368) is filed with your local township assessor. For Tyrone Township, you can request the form from the township assessor's office and submit it once you move into the home. If you owned a previous home and claimed the PRE on it, you must rescind that exemption when you sell the old property and apply for the exemption on your new home. Your real estate agent at The Moen Group can walk you through this process — it is straightforward but easy to overlook, and missing the filing deadline means paying the full school millage rate for the year.

Budgeting for taxes in your monthly housing cost

Many buyers focus on the mortgage payment and down payment when calculating affordability, but property taxes are a permanent part of your monthly housing cost that will increase over time (even if capped). Here is a practical way to estimate what your property taxes will look like on a custom home at Oaks of Tyrone:

This is an estimate. Actual millage rates change annually based on voter-approved initiatives and county budget adjustments, and your specific assessed value depends on the final appraised value of your completed home. We recommend working with your lender and your real estate agent to get a precise estimate based on your specific floor plan, lot, and customization choices.

How Big Sky Development helps buyers plan ahead

One advantage of building with an established custom builder like Big Sky Development is that their team has worked with Livingston County assessors for decades. They know how the assessment process works for new construction in Tyrone Township, what typical millage rates apply, and how to help buyers plan for their first-year tax bill.

Big Sky Development also partners with experienced, top-tier mortgage lenders who specialize in new construction financing. These lenders can factor your estimated property taxes into your pre-approval and monthly payment calculations, giving you a realistic picture of total housing costs before you commit. It is one more way the building process at Oaks of Tyrone is designed to remove uncertainty for buyers.

Frequently asked questions about new construction taxes