Principal Residence Exemption
Principal Residence Exemptions (fka Homestead Exemption), as defined by state law, is that portion of a dwelling or unit in a multiple-unit dwelling that is subject to taxation and is owned and occupied as a principle residence by the person claiming the exemption. Principal residence property also includes all of an owner’s unoccupied property classified as residential and contiguous to the dwelling that is owned and occupied as a principal residence by the owner of record. Principal residence properties are exempt from the tax levied by a local school district for school operating purposes to the extent provided under section 1211 of the revised school code, Act No. 451 of Public Acts 1976. Principal Residence Exemption forms are available from the link below or at the Assessor’s office.
Principal Residence Exemption (Homestead Exemption form)
Request to Rescind Homeowner’s Principal Residence Exemption
To qualify for the 18 mill exemption from school operating taxes (formerly the “Homestead Exemption”; now the Principal Residence Exemption), the property must be owned and occupied as a primary residence. On a property with a taxable value of $100,000, the exemption would be $1,800.
Commercial, industrial, multi-family and rental properties generally do not qualify for a Principal Residence Exemption.
Recently passed State Statutes increased the authority and responsibility of local assessors to audit Principal Residence Exemptions and determine their eligibility. For those found to be ineligible, the assessor shall deny the exemption for the current and three (3) previous years, including penalty and interest at 1.25% per month from the date the tax was originally due. Denials can be appealed to the Residential Small Claims Division of the State Tax Tribunal within 35 days of the date of the denial.
If the status of a property changes, the owner shall rescind the claim of exemption by filing the appropriate form with the local assessor, within 90 days of the change in status. The penalty for failure to file a rescind form is $5 per day, up to a maximum of $200.
Michigan Department of Treasury