Principal Residence Exemption in Michigan

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photo courtesy of reknowledgebase.com

photo courtesy of reknowledgebase.com

In the State of Michigan, when you purchase a home and it becomes your primary residence, you are then eligible to apply for the Principal Residence Exemption on your property taxes.

This is a tax break from the school operating fund costs in your annual taxes, up to 18 mills.  It significantly reduces your annual taxes.

In order to take advantage of this Exemption, you must complete a Principal Residence Exemption (PRE) Affidavit and have it in the hands of the Township Treasurer where the home is located.  This form must be filed on or before June 1 or on or before November 1.  Eligibility details, including the definition of “primary residence”, and any other requirements are all found in the Guidelines for the Michigan Principal Residence Exemption Program.

In a typical closing, the title company has prepared the required documents for the Buyers to apply for this Exemption and for the Sellers to rescind their right to the Exemption.  It is then in the best interest of the Buyers to hand deliver this form to the local Township and to retain a copy that has been date stamped by the Township as being “received”.

Once the Affidavit is filed, the Exemption remains in force for that property owner until it is rescinded.

 

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