Property taxes are calculated by taking the taxable value of the property (roughly one-half of what the property is worth) and multiplying it by the number of mills (approved by voters and reduced by the Headlee Amendment). Your Property Tax = Taxable value of property x Mills For example, if a property is worth $100,000, the taxable value would be about $50,000 (or less), and if the tax rate was 5 mills, the tax would be $250 ($50,000 x .005).

The Headlee Amendment of 1978 changed the Michigan Constitution. At the time, real estate was going up in value faster than the rate of inflation. So when taxing entities (cities, townships, state, etc.) calculated property taxes based on how much the property was worth, they would collect more than the increase in inflation  and often the property owners income. This meant people were paying a greater percentage of their paychecks for taxes year after year. To keep taxes from increasing more than inflation, the Headlee Amendment automatically rolls back the millage rate to equal the rate of inflation.

Proposal A was passed by voters in 1994 and changed the way schools are funded  from local property taxes to state taxes (i.e., the state sales tax). Proposal A also limited tax increases by capping increases to property values by the lesser of the inflation rate or 5%, giving Michigan property owners two limitations on property taxes  reducing tax rate (mills), and capping increases to property values.

When your property value went up, your taxes increased at the lesser of the rate of inflation or 5%. Your taxes will continue to go up until they catch up to the actual value of your property. If you sell or buy property, the taxable value will be reset at the sale price.

A Headlee override is a decision by the voters to eliminate the automatic rollback created by the Headlee Amendment