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Property tax bills on your primary residence are exempt from local school district operating tax levies of up to $18 million by using a principal residence exemption (PRE).

Effective Oct. 5, 2017 Michigan has changed some aspects of the law in regards to the PRE. 

  • The General Property Tax Act provides a misdemeanor penalty (up to 1 year in prison) and possible fine of up to $5,000 for property owners who attempt to claim the PRE exemption in Michigan and a similar credit for property in another state. Violation will also subject the property owner to the additional school district tax, penalties and interest.
  • To help enforce the Act, the amended General Property Tax Act now provides that the Department of Treasury, local assessor or county treasurer can require a property owner to submit a completed Principal Residence Exemption Affidavit for Similar Exemptions in Other States, Form 5565 within 30 days of being requested.

If a property once entitled to PRE is no longer your primary residence you should file a Request to Rescind Principal Residence Exemption, Form 2602 with the assessor within 90 days of the date the property no longer qualifies.

To ensure that you are in compliance with the changes to the PRE laws, contact your professional at UHY LLP in one of our many locations.