Property that is occupied by the owner as a principal residence may be exempt from a portion of local school operating taxes. This exemption permits the property to be taxed at a lower millage rate. To claim an exemption, the homeowner must
- own and occupy the property as his or her principal residence and
- complete a homeowner’s principal residence exemption affidavit (form 8.20) and
- file it with the local taxing authority by the filing deadline.
What are the filing deadlines?
On or before June 1 or on or before November 1. (MCL 211.7cc(2))
A principal residence affidavit that has been submitted and approved by June 1 will reduce that year’s summer and winter taxes, and all future years as long as the property is owned and occupied as your principal residence.
If a principal residence affidavit is submitted and approved after June 1, but before November 1, it will reduce that year’s winter taxes, and all future years as long as the property is owned and occupied as your principal residence.
How many Principal Residences can be claimed?
Historically, a homeowner could claim only one principal residence exemption at a time.
To help Michigan homeowners who bought a new home but could not sell their old home, the state enacted a law to permit homeowners to claim two principal residence exemptions at the same time. Effective April 8, 2008, if an owner is eligible for and claims an exemption for his or her current principal residence (the “old home”), the owner may be able to retain that exemption for not more than three years after the owner purchases a new principal residence and files a principal residence exemption affidavit for that new home.
To qualify for the continuing exemption, the property previously occupied as the principal residence must be for sale but not occupied, leased, or used for a business or commercial purpose. The owner must file on or before May 1 with the local taxing authority a conditional rescission, the form of which is prescribed by the Michigan Department of Treasury.
Does the exemption continue for nursing home residents?
Note that a person who previously occupied a principal residence but now resides in a nursing home or assisted living facility may retain an exemption on the property if that person “manifests an intent to return to the property.” MCL 211.7cc(5). All of the following conditions must be satisfied:
- the owner continues to own the property;
- the owner has not established a new principal residence;
- the owner maintains or provides for the maintenance of the property while residing in the nursing home or assisted living facility; and