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Guidelines for the Michigan Principal Residence Exemption Program Guidelines for the Michigan Principal Residence Exemption Program

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Michigan Department of Treasury 2856 (Rev. 02-21) Guidelines for the Michigan Principal Residence Exemption Program Guidelines for the Michigan Principal Residence Exemption Program These guidelines are compiled questions and answers from the previous four volumes published. It amends outdated information and includes new information. TABLE OF CONTENTS Chapter Page Chapter 1: Filing Deadlines .............................................................................................................................. 1 Chapter 2: Residency ........................................................................................................................................ 2 Chapter 3: Ownership ....................................................................................................................................... 3 Chapter 4: Qualified Principal Residence Property .......................................................................................... 4 Chapter 5: Multi-Purpose Property ................................................................................................................... 7 Chapter 6: Cooperative Housing Corporations ................................................................................................. 8 Chapter 7: Estates and Trusts ............................................................................................................................ 8 Chapter 8: Social Security Numbers ............................................................................................................... 10 Chapter 9: Rescinding an Exemption ............................................................................................................. 10 Chapter 10: Denials ......................................................................................................................................... 11 Chapter 11: Denial Appeals ............................................................................................................................ 12 Chapter 12: Board of Review ......................................................................................................................... 12 Chapter 13: Corrective Billing Procedures ..................................................................................................... 14 Chapter 14: Administrative Issues .................................................................................................................. 15 Chapter 15: Other Questions. .......................................................................................................................... 17 Chapter 1. Filing Deadlines 5. May an assessor deny an erroneous claim for a principal residence exemption? 1. Is there a filing deadline to request a principal residence exemption? Yes. MCL 211.7cc(6) allows an assessor to deny a new or existing claim for a principal residence Yes. There are two deadlines by which a Principal exemption if the assessor believes that the property Residence Exemption may be filed. The deadlines for which an exemption is claimed is not owned or for a property owner to file a “Principal Residence occupied as a principal residence of the person Exemption (PRE) Affidavit” (Form 2368) for taxes claiming the exemption. An assessor may deny a are on or before June 1 or on or before November 1. claim for a principal residence exemption for the current and three immediately preceding calendar 2. Where can I get a Principal Residence years. An assessor should use the Notice of Denial Exemption (PRE) Affidavit, Form 2368? of Principal Residence Exemption (Local (City/Township)), Form 2742, to deny a principal The Principal Residence Exemption (PRE) residence exemption. The principal residence Affidavit, Form 2368, and other principal residence exemption is removed by the assessor from the tax exemption forms should be available from your roll at the time the notice of denial is issued. local assessor or at www.michigan.gov/PRE. 6. May a closing agent be held liable by a buyer 3. What year’s taxes are affected by the principal or seller if the buyer is not granted a principal residence exemption? residence exemption because the closing agent did not provide the appropriate forms at closing, A valid PRE Affidavit, Form 2368, submitted to the or did not submit their forms timely? local tax collecting unit on or before June 1 will reduce that year's summer and winter taxes and No. Closing agents are required to provide an future years taxes as long as the property is owned affidavit and rescind form at closing. However, and occupied as your principal residence. A valid MCL 211.7cc(18) provides that there is no legal PRE Affidavit, Form 2368, submitted after June 1 course of action against the closing agent, by the but on or before November 1 will reduce that year's buyer or the seller, if the agent fails to provide a winter taxes and future year's taxes as long as the Principal Residence Exemption (PRE) Affidavit, property is owned and occupied as your principal Form 2368, or fails to file the form with the local residence. tax-collecting unit when requested to do so by the buyer or seller. Therefore, it is important for the 4. If I was eligible for the exemption on May 1st, seller and buyer to confirm that the appropriate but did not file timely, may I still file my claim? forms have been received and acted upon by the assessor. An owner who owned and occupied a principal residence on May 1 for taxes levied before January 7. What are the qualifications to be able to 1, 2012 for which the exemption was not on the tax appeal under MCL 211.7cc(18)? roll may file an appeal with the July board of review or December board of review in the year for The sale must have taken place after December 31, which the exemption was claimed or the closing statement preparer did not properly present immediately succeeding 3 years. For taxes levied a Principal Residence Exemption (PRE) Affidavit, after December 31, 2011, an owner who owned and Form 2368 or did not file the form with the local tax occupied a principal residence on June 1 or collecting unit if requested to do so. The buyers November 1 for which the exemption was not on may appeal to the Department of Treasury within the tax roll may file an appeal with the July board of 30 days of their first notification that an exemption review or December board of review in the year for was not recorded. which the exemption was claimed or the immediately succeeding 3 years. (Revised November 2016) 1 8. What information must be submitted with a your principal residence (see the tests in #2 of this MCL 211.7cc(18) appeal? section). A. Copy of warranty deed or land contract to verify 4. I have a home in Michigan and one in another ownership. state. May I claim an exemption on my Michigan B. Copy of driver license, voter registration, or home? other documents to verify occupancy. C. Completed Principal Residence Exemption You may claim the principal residence exemption if (PRE) Affidavit, Form 2368. you meet all of the criteria below: D. A letter indicating what years you are appealing. A. You are a resident of the State of Michigan (see Mail the information to the Principal Residence #1of this section). Exemption Unit, P.O. Box 30440, Lansing, MI B. You own and occupy the home as your principal 48909. residence (see #2 of this section). C. Neither you, nor your spouse if you file a joint Chapter 2. Residency income tax return, receive an exemption, deduction, or credit substantially similar to the 1. Who is a Michigan resident? Michigan principal residence exemption on property you own in another state. You are a Michigan resident if Michigan is your D. You have not filed a non-resident Michigan permanent home. Your permanent home is the place income tax return. you intend to return to whenever you go away. A E. You have not filed a tax return as a resident of temporary absence from Michigan, such as another state. spending the winter in another state, does not make you a part-year resident. 5. I own property in Michigan, but moved to another state and have established residency 2. What determines principal residence? there. May I still claim my Michigan home? Michigan law defines principal residence as the one No. Only Michigan residents are eligible for this place where a person has his or her true, fixed, and exemption. If you wish to re-establish Michigan permanent home to which, whenever absent he or residency in order to claim this exemption, you she intends to return and that shall continue as a must do so before the filing deadlines. Re- principal residence until another principal residence establishing your residency would include such is established. In order to verify a person’s claim things as registering to vote in the township or city that a particular property is a principal residence, where your home is located; registering your the Department of Treasury will accept various vehicle in Michigan; and getting a Michigan documents that, taken together, establish that the driver’s license or a Michigan personal person or persons filing the claim occupy the identification card. As a Michigan resident you may property as a principal residence. Examples include be liable for Michigan income taxes. driver’s license, voter registration card, cancelled checks listing the property address, statements such 6. I temporarily work and live outside Michigan as medical, bank or charge accounts, income tax (e.g. teaching sabbatical, military assignment), records indicating
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