Principal Residence Exemption

Michigan has a principal residence exemption that can reduce your property-tax bill. (This used to be called the homestead exemption.) If you qualify, your home will be exempt from a portion of school operating taxes. Here's an introduction to how this works.

  • Residency. You need to be a Michigan resident, meaning that Michigan is your permanent home - the place you intend to return to whenever you go away. A temporary absence, such as going to Florida for the winter, won't destroy your status as a Michigan resident. You may be asked to show documents verifying your claim that a specific home is your principal residence. Examples include a driver's license, voter registration card, checks listing the property address, income tax records, and charge account statements.
  • Multiple Residences. If you own two homes in Michigan, only one of them can be your principal residence.
  • Claiming the Exemption. You claim the exemption by signing a Principal Residence Exemption Affidavit, and filing it with the local tax assessor. When you buy a home, the closing officer or your real estate agent may help you complete the Affidavit form, and may file it for you. If the assessor receives your Affidavit by June 1, you'll benefit from the exemption on both your summer and winter tax bills. If you miss the June 1 deadline but the assessor has the Affidavit by November 1, you'll benefit from exemption on your winter tax bill. (Note: If the seller already has the exemption in place when you buy the home, the taxes for the entire current year will be based on the home's exempt status. The deadlines for your filing will not be critical.)
  • Re-filing. Once the Affidavit is filed with the assessor, there's no need to file another one in later years. You'll get the benefit of the exemption as long as you continue to own and occupy the home as your principal residence.

The attorneys at the Ann Arbor firm of Hamilton, London, & Davis can advise you on how the principal residence exemption applies to your specific situation.

Categories: Real Estate Law