Detroit, MI Taxes 2025
Complete local tax guide and OBBBA calculator
On This Page
Detroit Tax Overview 2025
Detroit has local income tax and very high property taxes.
Local Income Tax
2.4%
City/county rate
Sales Tax
6.00%
State + local
Property Tax
3.78%
Effective rate
Median Home
$65,000
Home value
State Tax Information
Detroit is located in Michigan (4.25% state income tax)
💼 Detroit Local Income Tax
Detroit imposes a local income tax of 2.4% on residents. This is in addition to any state income tax you may owe to Michigan.
Local income taxes are common in Ohio, Pennsylvania, and a few other states. They're typically withheld from your paycheck if you work in Detroit, regardless of where you live.
Total Income Tax Burden in Detroit
🛒 Detroit Sales Tax 2025
The combined sales tax rate in Detroit is 6.00%. This includes both the Michigan sales tax and any local sales taxes.
Sales tax applies to most retail purchases in Detroit. Some items like groceries, prescription medications, and clothing may be exempt or taxed at reduced rates depending on Michigan law.
Sales Tax Breakdown
Sales Tax Examples
| Purchase Amount | Sales Tax | Total |
|---|---|---|
| $50 | $3.00 | $53.00 |
| $100 | $6.00 | $106.00 |
| $500 | $30.00 | $530.00 |
| $1,000 | $60.00 | $1,060.00 |
🏠 Detroit Property Tax 2025
The average effective property tax rate in Detroit is 3.78%. Based on the median home value of $65,000, the typical homeowner pays approximately $2,457 per year in property taxes.
Property taxes fund local services including schools, police, fire departments, roads, and parks. Rates vary by specific location within Detroit based on school district and other taxing authorities.
Estimated Annual Property Tax in Detroit
| Home Value | Annual Tax | Monthly | SALT Deductible? |
|---|---|---|---|
| $200,000 | $7,560 | $630 | ✓ Yes |
| $300,000 | $11,340 | $945 | ✓ Yes |
| $400,000 | $15,120 | $1,260 | ✓ Yes |
| $500,000 | $18,900 | $1,575 | ✓ Yes |
| $750,000 | $28,350 | $2,363 | ✓ Yes |
| $1,000,000 | $37,800 | $3,150 | ✓ Yes |
💡 SALT Tip: Under the OBBBA, you can deduct up to $40,000 in state and local taxes (SALT) on your federal return. This includes property taxes, state income taxes, and local income taxes.
💰 Detroit Cost of Living
Housing Costs
Tax Summary
OBBBA Tax Benefits for Detroit Residents
High property taxes make SALT cap increase extremely valuable.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced several federal tax deductions that can significantly reduce your tax burden as a Detroit resident.
Available OBBBA Deductions:
Calculate Your Detroit Tax Savings
Use our free OBBBA calculator to see exactly how much you could save on your 2025 federal taxes as a Detroit resident.
Calculate My SavingsFrequently Asked Questions
What is the sales tax in Detroit?
The combined sales tax rate in Detroit is 6.00%. This includes both state and local sales taxes.
Does Detroit have a local income tax?
Detroit has a local income tax of 2.4%. This is in addition to any state and federal income taxes.
What is the property tax rate in Detroit?
The average effective property tax rate in Detroit is 3.78%. On a home worth $65,000, you'd pay approximately $2,457 per year.
How do OBBBA deductions benefit Detroit residents?
High property taxes make SALT cap increase extremely valuable. You can use our free calculator to estimate your total savings from tips, overtime, auto loan interest, SALT, and senior bonus deductions.