diff --git a/src/AddIns/Misc/PackageManagement/Project/Src/Scripting/MSBuildProjectPropertiesMerger.cs b/src/AddIns/Misc/PackageManagement/Project/Src/Scripting/MSBuildProjectPropertiesMerger.cs
index 07cba71416..e970e6adeb 100644
--- a/src/AddIns/Misc/PackageManagement/Project/Src/Scripting/MSBuildProjectPropertiesMerger.cs
+++ b/src/AddIns/Misc/PackageManagement/Project/Src/Scripting/MSBuildProjectPropertiesMerger.cs
@@ -93,7 +93,7 @@ namespace ICSharpCode.PackageManagement.Scripting
 		
 		void SetPropertyInSharpDevelopProject(ProjectPropertyElement msbuildProjectProperty)
 		{
-			sharpDevelopProject.SetProperty(msbuildProjectProperty.Name, msbuildProjectProperty.Value);
+			sharpDevelopProject.SetProperty(msbuildProjectProperty.Name, msbuildProjectProperty.Value, treatPropertyValueAsLiteral: false);
 		}
 		
 		bool HasMSBuildProjectPropertyBeenUpdated(ProjectPropertyElement msbuildProjectProperty, ProjectPropertyElement sharpDevelopProjectProperty)
diff --git a/src/AddIns/Misc/PackageManagement/Test/Src/Scripting/MSBuildProjectPropertiesMergerTests.cs b/src/AddIns/Misc/PackageManagement/Test/Src/Scripting/MSBuildProjectPropertiesMergerTests.cs
index 3989986081..f9fe8ba509 100644
--- a/src/AddIns/Misc/PackageManagement/Test/Src/Scripting/MSBuildProjectPropertiesMergerTests.cs
+++ b/src/AddIns/Misc/PackageManagement/Test/Src/Scripting/MSBuildProjectPropertiesMergerTests.cs
@@ -260,5 +260,17 @@ namespace PackageManagement.Tests.Scripting
 			
 			Assert.IsFalse(propertiesMerger.Result.AnyPropertiesChanged());
 		}
+		
+		[Test]
+		public void Merge_MSBuildProjectHasNewPropertyAddedWithEncodableCharacters_PropertyAddedToSharpDevelopProjectWithoutEncodingCharacters()
+		{
+			var propertyGroup = msbuildProject.Xml.AddPropertyGroup();
+			propertyGroup.SetProperty("Test", "$(Value)");
+			
+			Merge();
+			
+			string value = sharpDevelopProject.GetUnevalatedProperty("Test");
+			Assert.AreEqual("$(Value)", value);
+		}
 	}
 }