The PRE exempts your owner-occupied primary residence from 18 mills of local school operating tax. On a $260,000 home, this saves roughly $1,170 per year in property tax compared to a non-homestead rate. You must file a PRE Affidavit with your local assessor by June 1 (or November 1 for late filings) to claim the exemption. The PRE applies year-round once filed and stays in effect until you sell or lose primary residence status.

Proposal A from 1994 caps annual increases in taxable value on principal residences at inflation rate or 5%, whichever is lower. This protects long-term owners from rapid tax increases when market values surge. When you sell, the taxable value 'pops up' to the state equalized value (50% of market) for the next owner, which is why new buyers often pay much higher property tax than long-term neighbors on the same street.

Detroit's $95,000 median reflects decades of population decline and tax base erosion, though prices have stabilized and risen in some neighborhoods (Corktown, Midtown, downtown) where revitalization is occurring. Most lenders will not finance homes under $50,000 due to minimum loan thresholds. Programs like the Detroit Home Mortgage initiative help bridge the appraisal gap that has historically blocked conventional financing in the city.