Michigan Makes Property-Tax Foreclosure Avoidance Programs Permanent

Michigan’s property-tax foreclosure avoidance tools are now permanent, but they are not automatic benefits for every homeowner or available in every county.

Gov. Gretchen Whitmer’s office announced on July 27, 2026, that she had signed Senate Bill 423. The legislative record lists the governor’s approval on July 21, filing with the Secretary of State on July 27 and assignment as Public Act 79 of 2026 with immediate effect on July 29.

The law removes expiration dates for delinquent-property-tax installment payment plans and tax foreclosure avoidance agreements. It also restores authority for certain delinquent-tax payment reductions that had expired July 1, 2025. Residents who are behind on property taxes still must contact the county treasurer or other foreclosing governmental unit to determine whether a local program is available and whether they qualify.

What Public Act 79 changes

Senate Bill 423 amends Michigan’s General Property Tax Act. It eliminates the June 30, 2026, sunset that applied to tax foreclosure avoidance agreements and removes the sunset for certain delinquent-property-tax installment and payment-reduction tools.

Those tools can allow participating local governments to work with residents who have delinquent property taxes. They do not cancel delinquent taxes statewide, guarantee approval, automatically stop an existing foreclosure or extend every homeowner’s individual deadline.

The law’s immediate-effect status means the enacted changes are in force, but each county or other foreclosing governmental unit still controls whether and how it participates within the statutory framework.

How a foreclosure-avoidance agreement may work

A county treasurer may enter into a tax foreclosure avoidance agreement for up to five years with an owner of residential property that has been returned as delinquent or forfeited to the county treasurer, if the statutory requirements are met.

The owner must make an initial payment of at least 10% of the delinquent taxes owed on the property. The agreement then requires regular periodic installment payments. The final payment may not be disproportionately larger than the regular installments required in prior years.

The agreement does not freeze or erase the debt. Interest continues to accumulate while the agreement is in effect. The owner must also make timely payments required by the agreement, including current nondelinquent property taxes on the property.

While an agreement is effective, the property must be withheld from or removed from the foreclosure petition as provided by law. That protection depends on compliance with the agreement. A county treasurer may not enter into more than two tax foreclosure avoidance agreements with the same owner.

Local governments decide whether to participate

Michigan law does not require every county or local government to offer identical installment plans, payment reductions or foreclosure-avoidance agreements. Participation is optional, and local officials may establish procedures and terms within the law.

The foreclosing governmental unit is generally the county. Some counties, however, may elect to have the Michigan Department of Treasury assume that role. Homeowners should confirm which government entity is handling the property before submitting an application or payment.

The House Fiscal Agency said the fiscal effects may vary by local government. A payment-reduction program could reduce potential revenue from delinquent taxes in some circumstances, while collecting money that otherwise might not be paid could increase receipts for participating governments. The agency said there was not enough information to estimate a uniform statewide effect.

What homeowners should do now

Residents who have received delinquency, forfeiture or foreclosure notices should contact the county treasurer or foreclosing governmental unit before the next deadline. Ask:

Whether the property and owner may qualify for an installment plan, foreclosure-avoidance agreement or payment-reduction program.
What the full delinquent balance is, including interest, penalties and fees.
How much the initial payment would be and when it is due.
How often payments must be made and the total amount required over the agreement term.
Whether interest will continue to accrue and which current taxes must be paid separately.
What happens if a payment is late or the agreement is not completed.
Whether the county or the Michigan Department of Treasury is handling the foreclosure process.

Homeowners should request the payment schedule, interest terms and consequences of default in writing. They should keep copies of notices, applications, receipts and communications with the government unit handling the case.

The law preserves an option, not a guarantee

Public Act 79 preserves local tools intended to help some residents avoid property-tax foreclosure. It does not eliminate the delinquency, guarantee a five-year agreement, require every county to offer a plan or resolve an existing foreclosure case automatically.

Missing required payments can leave a property exposed to continued forfeiture or foreclosure proceedings. For homeowners behind on property taxes, the critical next step is early contact with the government unit handling the case and a written explanation of the available options, deadlines and total cost.

For the statutory framework and legislative history, see the enrolled Senate Bill 423 text, the Michigan Legislature bill record, and the governor’s signing announcement.

Sources

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