Michigan Property Tax Exemptions: Homestead, Senior and Veteran Relief

Michigan's Principal Residence Exemption (PRE) exempts a principal residence from the tax levied by the local school district for school operating purposes (to the extent provided in the Revised School Code). The property must be owned and occupied as a principal residence by the owner when the affidavit is signed.

File a principal residence exemption affidavit with the local tax collecting unit (city or township) where the property is located. Once accepted, the exemption continues without annual refiling until December 31 of the year the property is transferred or stops being a principal residence. An owner must file a rescission form within 90 days after the property stops being a principal residence; late filing carries a penalty of $5 per day, up to $200.

The affidavit must be filed on or before June 1 for the immediately succeeding summer tax levy, or on or before November 1 for the immediately succeeding winter tax levy.

A Michigan resident veteran's homestead is exempt from the collection of property taxes under the General Property Tax Act if the VA has determined the veteran is permanently and totally disabled from military service and entitled to benefits at the 100% rate, has rated the veteran individually unemployable, or the veteran received VA assistance for specially adapted housing. A surviving spouse continues to qualify (including on a later-acquired homestead held solely in the spouse's name) as long as the spouse does not remarry. Apply to the local assessing officer on the State Tax Commission form, after January 1 and before December 31 of the year claimed; for taxes levied on or after January 1, 2025, the exemption remains in effect without reapplication until rescinded.

Under Proposal A, a parcel's taxable value can rise each year by no more than the lesser of 5% (a multiplier of 1.05) or the inflation rate, plus additions, and not above its state equalized value. After a transfer of ownership, taxable value is "uncapped" and reset to the state equalized value for the following year.

Homestead Property Tax Credit: a credit against the Michigan income tax for property taxes on a homestead (renters count 23% of gross rent for tax years after 2017). The combined credit was capped at $1,500 per year from 2018 and is adjusted for inflation after 2021; the credit phases down by 10% for each $1,000 of total household resources above a threshold that was $51,000 from 2018 (inflation-adjusted after 2021); and owners whose homestead taxable value exceeds $135,000 (through 2021, inflation-adjusted afterward) are ineligible. The statute does not list the current inflation-adjusted amounts.

Protest the assessment to the local board of review, which meets starting the second Monday in March (a city or township may set the Tuesday or Wednesday after). Protests are made in person; nonresidents may protest by letter, and residents may do so by letter only if the local government allows it. The board must notify taxpayers of its decision in writing by the first Monday in June, including the final date to appeal further to the Michigan Tax Tribunal.

Collection begins when the treasurer receives the tax roll. Taxes paid after February 14 and before they are returned as delinquent carry a late penalty equal to 3% of the tax; a property tax administration fee of not more than 1% of the bill may apply on taxes paid before February 15 of the following year.