Principal Residence Exemption

If you've ever purchased a home, you probably remember the amount of paperwork involved. The Principal Residence Exemption (PRE) Affidavit is typically presented to you at your closing if you're buying a house. If you didn't get this form, you'll need to know how to file this affidavit.

The PRE is sometimes still referred to as the "homestead exemption". It's an exemption from the local school operating millage. In Grand Rapids, it's up to 18 mills. If you own and occupy your home as your primary residence, then you're eligible to claim the Principal Residence Exemption.  You're allowed to claim only one Principal Residence Exemption in Michigan and cannot claim a similar exemption in another state at the same time.

PRE Status

When we say status, we're talking about the percentage of your PRE. This could range from 0% or 100% because you could live in a multi-family home or rent rooms in your home. For example, if you own a duplex and live in one side of it, you could have 50% PRE. If you do have 100% PRE, you won't pay any of the 18 mills of school operating tax.

You have a few options to check your PRE status:

File your PRE

If you find out you have 0% PRE, but you live in the home you own, you should file the PRE Affidavit. The exemption is valid until you:

  • Move out of your home
  • Rent out your home
  • Sell your home
  • Some other status change

This form has to be filed on or before June 1st of the year you want the exemption to be applied.  **The filing deadline has been extended to June 30 for 2020 only.**

    Print and file this original form with the Assessor's Office by mail, or drop it off in person:

File a Principal Residence Exemption (PRE) Affidavit

Remove your PRE

If you sell your home, or move out but still own it, you need to rescind or remove your PRE. You don't qualify for the exemption on the property any more. If you're selling your home and moving into another home in Michigan, you should also read the next section about conditional rescissions.

Remove your PRE by filing this form with the Assessor's Office:

File a Request to Rescind Principal Residence Exemption (PRE)

Keep your PRE while your house is for sale

This is called a conditional rescission and it comes with some conditions. Here are the eligibility requirements:

  • This can only be applied for up to 3 years
  • You have to file the Conditional Rescission form on or before June 1st of the first year, and before December 31st for the two following years

If you have a property in Michigan that you're trying to sell but are unable to, you might be able to keep the PRE. You'll need to have a PRE on another property in Michigan. The conditions are:

  • It's for sale. You'll need to supply documentation that it's listed
  • The property is not occupied or leased. You can't rent it out or let someone live there
  • It's not being used for business or commercial use
  • You buy a new Michigan property and claim principal residence on that new property. You'll need to supply a copy of the PRE affidavit for your new home in Michigan

There are instructions for this form on the second page. File it with Assessor's Office:

File a Conditional Rescission of Principal Residence Exemption

Active Duty Military PRE

Filing the Active Duty Military PRE allows home owners who are currently serving to keep their PRE in a situation where they would normally no longer qualify. If you're going to be deployed but plan to rent or lease your home while you're gone, you can keep your PRE as long as these conditions are met:

  • You're absent while on active duty in the armed forces of the United States
  • The dwelling qualifies as your principal residence prior to deployment
  • You file Form 4660 with the Assessor's Office on or before May 1st, stating that you intend to occupy the dwelling as your principal residence upon completion of your active duty

If this applies to you, you'll want to file this affidavit with the Assessor's Office:

File a PRE Active Duty Military Affidavit

Appeals

You could receive a letter from the State or City stating that your PRE has been denied.

State of Michigan Denial

If the Michigan Department of Treasury sent you the letter, and you don't agree with the denial, you have an option to appeal it. You have to appeal in writing to the Department of Treasury within 35 days of the date on the denial letter. There are instructions for the appeal process on their website.

City Denial

If you receive the Notice of Denial from the City, the reason for the denial is provided in Section 11. If you don't agree with the denial, you can file a petition with the Michigan Tax Tribunal. The petition has to be filed within 35 days of the date on the Notice of Denial.