Homestead / Primary Residence Exemption (PRE)

Principal residence means:

“…the one place where an owner of the property has his or her true, fixed, and permanent home to which, whenever absent, he or she intends to return and that shall continue as a principal residence until another principal residence is established.”

Provisions which qualify a property for the Principal Residence Exemption
There are a number of provisions which govern the Michigan Principal Residence Exemption. The property must be owned and occupied as the owner’s principal residence. The only exception to this provision is for those vacant parcels adjoining the property owner’s principal residence.

The taxpayer:

  1. must own the property by May 1st of the tax year involved;
  2. cannot claim any similar Primary Residence Exemption in another state;
  3. cannot file a nonresident Michigan income tax return.

Factors considered as evidence of Michigan Principal Residency

  1. Are you a Michigan resident and is Michigan your permanent home?
  2. Do you file a Michigan Income Tax Return?
  3. Is the address on last year’s Michigan Income Tax Return the same address receiving the exemption?
  4. Do you have a Michigan Driver’s License?
  5. Does your Michigan Driver’s License identify your address as the same address receiving the principal residence exemption?
  6. Are you registered to vote at the address receiving the exemption?
  7. Where do your children attend school?
  8. Do you receive a similar property tax exemption or credit elsewhere in Michigan in any other place outside Michigan?
  9. Do you have a business on the property?

How to claim your Principal Residence Exemption in Michigan
Michigan property owners must file a Michigan Department of Treasury Form 2368 affidavit with their taxing jurisdiction not later than May 1 of the tax year. This form, which is known as the principal residence exemption affidavit, can be found on the Michigan Department of Treasury’s website at www.michigan.gov/PRE

Conditional Rescission
Falling property values in Michigan have impacted the principal residence exemption. Recent amendments adopted since April 10, 2008 include, in addition to a property owner’s current principal residence, property owner’s being able to claim an exemption for up to three years on property which was previously exempt as the owner’s principal residence if:

  • that property is not occupied;
  • is for sale;
  • is not leased;
  • is not used for any business or commercial purpose.

How to claim your Conditional Rescission in Michigan
Michigan property owners must file a Michigan Department of Treasury Form 4640 affidavit with their taxing jurisdiction on or before May 1 of the tax year. This form, which is known as the principal residence exemption affidavit, can be found on the Michigan Department of Treasury’s website at www.michigan.gov/treasury

Annually, the property owner must verify to the taxing jurisdiction on or before December 31 that the property is:

  • retained;
  • not occupied;
  • for sale;
  • not leased;
  • not used for any business or commercial purpose.

Conditional Rescission and Leased Properties
Additionally, your property is eligible for conditional rescission if it’s offered for lease; but once you lease your property, the conditional rescission will be denied retroactively effective December 31 of the year immediately preceding the year in which your property is leased.

Exemptions for Active Duty Military Personnel
Another amendment adopted effective April 10, 2008 provides exemptions for active duty military personnel. Members of the military deployed on active duty can rent their homes without jeopardizing their principal residence exemptions.

[top of page]
 

We welcome your calls.

Dan A. Penning

Michigan Property Tax Uncapping Expert Dan A. Penning Icon

In Suttons Bay: 231.271.4500

In Farmington Hills: 248.893.1400

 
www.PenningGroup.com

Blog: www.SuttonsBayLaw.com

Cottage Law Website: www.Cottage-Law.com

Michigan Property Tax Appeal Website: www.PropertyTaxAppealInstitute.com

 
Office Locations

Northern Michigan
In Suttons Bay:

101 S. Cedar St., The Depot
P.O. Box 490
Suttons Bay, MI 49682

“The Home of Cottage Law”

231.271.4500

Metro Detroit
In Farmington Hills:

27555 Executive Drive
Suite 165
Farmington Hills, MI 48331-3554

248.893.1400