Principal Residence Exemptions FAQ
Q: What is the Principal Residence Exemption (PRE)?
A: The Homeowner’s Principal Residence Exemption is an exemption from a portion of the local school operating tax. To be eligible to receive the exemption, the property must be owned and occupied as your principal residence. Business or rental property, or 2nd homes (vacation homes)which are not your primary residence, do not qualify for the exemption.
Q: How do I apply for the exemption?
A: To claim an exemption, the owner must complete a Principal Residence Exemption Affidavit, along with any other requested information to verify that the property requested is your primary residence. For a blank affidavit, please see the list of forms below:
Q: Is there a deadline to apply and do I need to reapply each year?
A: To claim a new exemption the homeowner needs to apply by June 1st to qualify for a change on that year’s taxes. This means that you must own and occupy the property as your primary residence on or before June 1st for the July tax bill to reflect the PRE status. Once applied for, there is no need to submit anything until there is a change of use of the property.
Q: Do I have to do anything if I no longer plan to use my property as my principal residence?
A: If you will no longer be using the property as your principal residence, you need to let the assessor’s office know, so that they can change the status of the PRE. The State of Michigan Department of Treasury requires that a Rescind of Principal Residence Exemption (see forms below) be filed within 90 days of the property not being used as your homestead.
Q: I did have a Principal Residence Exemption on my home however it is now vacant and listed for sale. I have since moved to a new home where I am claiming a new PRE. Can I claim both homes?
A: If you had a valid PRE on your previous home and are in the process of selling the home, you may be able to claim a Conditional Rescission of Principal Residence Exemption (form available below). To be eligible you must:
- Continue to live in Michigan
- The home must be vacant (not rented)and actively listed for sale (provide proof of active listing)
- The home must have had a valid PRE in place prior.
- The home must not be used for any business or commercial purpose
- Form must be filed by December 31st to qualify for the next tax year
Q: How much does the Principal Residence Exemption save me in taxes?
A: The PRE is an exemption from the 18 mills of school operating tax; each mill is multiplied by every 1,000 of taxable value.
On a home with a taxable value of $75,000, the exemption is calculated as follows:
$75,000/1,000 = 75 75*18 = $1,350 in taxes saved
