Michigan Guidelines for the Michigan Homeowner's Principal Residence Exemption Program (no form)

Guidelines for the Michigan Homeowner's Principal Residence Exemption Program (no form)
2856, Guidelines for the Michigan Principal Residence Exemption Program
Michigan Department of Treasury
2856 (Rev. 02-21)

Guidelines

for the Michigan Principal

Residence Exemption Program

Guidelines for the Michigan Principal Residence Exemption Program
These guidelines are compiled questions and answers from the previous four volumes published. It amends
outdated information and includes new information.
TABLE OF CONTENTS
Chapter
Page
Chapter 1: Filing Deadlines .............................................................................................................................. 1
Chapter 2: Residency ........................................................................................................................................ 2
Chapter 3: Ownership ....................................................................................................................................... 3
Chapter 4: Qualified Principal Residence Property .......................................................................................... 4
Chapter 5: Multi-Purpose Property ................................................................................................................... 7
Chapter 6: Cooperative Housing Corporations ................................................................................................. 8
Chapter 7: Estates and Trusts ............................................................................................................................ 8
Chapter 8: Social Security Numbers ............................................................................................................... 10
Chapter 9: Rescinding an Exemption ............................................................................................................. 10
Chapter 10: Denials......................................................................................................................................... 11
Chapter 11: Denial Appeals ............................................................................................................................ 12
Chapter 12: Board of Review ......................................................................................................................... 12
Chapter 13: Corrective Billing Procedures ..................................................................................................... 14
Chapter 14: Administrative Issues .................................................................................................................. 15
Chapter 15: Other Questions. .......................................................................................................................... 17

Chapter 1. Filing Deadlines

5. May an assessor deny an erroneous claim for a
principal residence exemption?

1. Is there a filing deadline to request a principal
residence exemption?

Yes. MCL 211.7cc(6) allows an assessor to deny a
new or existing claim for a principal residence
exemption if the assessor believes that the property
for which an exemption is claimed is not owned or
occupied as a principal residence of the person
claiming the exemption. An assessor may deny a
claim for a principal residence exemption for the
current and three immediately preceding calendar
years. An assessor should use the Notice of Denial
of Principal Residence Exemption (Local
(City/Township)), Form 2742, to deny a principal
residence exemption. The principal residence
exemption is removed by the assessor from the tax
roll at the time the notice of denial is issued.

Yes. There are two deadlines by which a Principal
Residence Exemption may be filed. The deadlines
for a property owner to file a “Principal Residence
Exemption (PRE) Affidavit” (Form 2368) for taxes
are on or before June 1 or on or before November 1.
2. Where can I get a Principal Residence
Exemption (PRE) Affidavit, Form 2368?
The Principal Residence Exemption (PRE)
Affidavit, Form 2368, and other principal residence
exemption forms should be available from your
local assessor or at www.michigan.gov/PRE.

6. May a closing agent be held liable by a buyer
or seller if the buyer is not granted a principal
residence exemption because the closing agent
did not provide the appropriate forms at closing,
or did not submit their forms timely?

3. What year’s taxes are affected by the principal
residence exemption?
A valid PRE Affidavit, Form 2368, submitted to the
local tax collecting unit on or before June 1 will
reduce that year's summer and winter taxes and
future years taxes as long as the property is owned
and occupied as your principal residence. A valid
PRE Affidavit, Form 2368, submitted after June 1
but on or before November 1 will reduce that year's
winter taxes and future year's taxes as long as the
property is owned and occupied as your principal
residence.

No. Closing agents are required to provide an
affidavit and rescind form at closing. However,
MCL 211.7cc(18) provides that there is no legal
course of action against the closing agent, by the
buyer or the seller, if the agent fails to provide a
Principal Residence Exemption (PRE) Affidavit,
Form 2368, or fails to file the form with the local
tax-collecting unit when requested to do so by the
buyer or seller. Therefore, it is important for the
seller and buyer to confirm that the appropriate
forms have been received and acted upon by the
assessor.

4. If I was eligible for the exemption on May 1st,
but did not file timely, may I still file my claim?
An owner who owned and occupied a principal
residence on May 1 for taxes levied before January
1, 2012 for which the exemption was not on the tax
roll may file an appeal with the July board of
review or December board of review in the year for
which the exemption was claimed or the
immediately succeeding 3 years. For taxes levied
after December 31, 2011, an owner who owned and
occupied a principal residence on June 1 or
November 1 for which the exemption was not on
the tax roll may file an appeal with the July board of
review or December board of review in the year for
which the exemption was claimed or the
immediately succeeding 3 years.
(Revised November 2016)

7. What are the qualifications to be able to
appeal under MCL 211.7cc(18)?
The sale must have taken place after December 31,
closing statement preparer did not properly present
a Principal Residence Exemption (PRE) Affidavit,
Form 2368 or did not file the form with the local tax
collecting unit if requested to do so. The buyers
may appeal to the Department of Treasury within
30 days of their first notification that an exemption
was not recorded.

1

8. What information must be submitted with a
MCL 211.7cc(18) appeal?

your principal residence (see the tests in #2 of this
section).

A. Copy of warranty deed or land contract to verify
ownership.
B. Copy of driver license, voter registration, or
other documents to verify occupancy.
C. Completed Principal Residence Exemption
(PRE) Affidavit, Form 2368.
D. A letter indicating what years you are appealing.

4. I have a home in Michigan and one in another
state. May I claim an exemption on my Michigan
home?
You may claim the principal residence exemption if
you meet all of the criteria below:
A. You are a resident of the State of Michigan (see
#1of this section).
B. You own and occupy the home as your principal
residence (see #2 of this section).
C. Neither you, nor your spouse if you file a joint
income tax return, receive an exemption,
deduction, or credit substantially similar to the
Michigan principal residence exemption on
property you own in another state.
D. You have not filed a non-resident Michigan
income tax return.
E. You have not filed a tax return as a resident of
another state.

Mail the information to the Principal Residence
Exemption Unit, P.O. Box 30440, Lansing, MI
48909.
Chapter 2. Residency
1. Who is a Michigan resident?
You are a Michigan resident if Michigan is your
permanent home. Your permanent home is the place
you intend to return to whenever you go away. A
temporary absence from Michigan, such as
spending the winter in another state, does not make
you a part-year resident.

5. I own property in Michigan, but moved to
another state and have established residency
there. May I still claim my Michigan home?

2. What determines principal residence?
Michigan law defines principal residence as the one
place where a person has his or her true, fixed, and
permanent home to which, whenever absent he or
she intends to return and that shall continue as a
principal residence until another principal residence
is established. In order to verify a person’s claim
that a particular property is a principal residence,
the Department of Treasury will accept various
documents that, taken together, establish that the
person or persons filing the claim occupy the
property as a principal residence. Examples include
driver’s license, voter registration card, cancelled
checks listing the property address, statements such
as medical, bank or charge accounts, income tax
records indicating the mailing address and
insurance policies. No one of these factors taken
alone is controlling over any other factor.

No. Only Michigan residents are eligible for this
exemption. If you wish to re-establish Michigan
residency in order to claim this exemption, you
must do so before the filing deadlines. Reestablishing your residency would include such
things as registering to vote in the township or city
where your home is located; registering your
vehicle in Michigan; and getting a Michigan
driver’s license or a Michigan personal
identification card. As a Michigan resident you may
be liable for Michigan income taxes.

3. I own two homes in Michigan. For which
home do I claim exemption?

Yes, if you intend to return to the property as a
principal residence and do not rent the home to
another person.

6. I temporarily work and live outside Michigan
(e.g. teaching sabbatical, military assignment),
but remain a Michigan resident and own a home
in Michigan. May I claim an exemption on my
Michigan home?

Claim the exemption for the home you occupy as
(Revised November 2016)

2

Chapter 3. Ownership

exercise the option to buy, you may claim an
exemption.

1. May renters file for this exemption?

7. I am a senior citizen living in my home. I sold
my home to my daughter and did not keep a life
estate, but we have a verbal agreement that I
may remain here until I die or choose to leave.
May I claim my home?

No. You must own your principal residence to
claim an exemption on it.
2. My children co-own my home. Do they also
have to sign the affidavit even though they don’t
live with me?

No. Any ownership interest must be in writing to be
valid. For principal residence exemption purposes, a
notarized or recorded agreement helps ensure that
the ownership interest was timely created and not
predated following an audit of a person’s principal
residence exemption. However, by law, the
agreement does not need to be notarized or
recorded.

No. Only co-owners who occupy the home as their
principal residence should be listed on the affidavit
and sign it. If your children also own and occupy
their own home they may file a claim for their
principal residence, not yours.
3. My children own my home, but I hold a life
estate. May I claim the exemption?

8. My sister and I each own and occupy a
separate home on the same parcel of property,
which we co-own. May we claim an exemption
for both homes?

Yes. Complete a Principal Residence Exemption
(PRE) Affidavit, Form 2368 using your name,
address, social security number and signature. Your
children should not sign the Principal Residence
Exemption (PRE) Affidavit, Form 2368.

Yes. If the values of the homes are equal, you
would each be entitled to a 50% exemption.

4. I own my home but rent an apartment closer
to my work. My apartment address is where I’m
registered to vote and is the address on my
driver’s license. May I still claim my home?

9. The owners of a property deeded their home
to an LLC that they own. They still occupy the
home. Are they entitled to a principal residence
exemption?

No. Your apartment is considered your principal
residence, because you vote in the township where
the apartment is located and the apartment is the
address on your driver’s license.

No. MCL 211.7cc states that the owner of property
may be entitled to a principal residence exemption.
MCL 211.7dd defines an owner as a “person”
except in specifically identified exceptions. It
further defines person as an individual for purposes
of MCL 211.7cc. The LLC owns the home, the
individual owns the LLC, and therefore the property
does not qualify for a principal residence
exemption.

5. I purchased my principal residence on a land
contract. May I claim the exemption?
Yes. Complete a Principal Residence Exemption
(PRE) Affidavit, Form 2368 using your name,
address, social security number and signature, not
the information of the land contract holder.

10. I am building a home on property I lease. Am
I entitled to a principal residence exemption?

6. I am leasing my home with an option to buy.
May I claim my home?

Yes, once the house is completed and you move in.
You are only entitled to a principal residence
exemption on the house; the value of the land must
be computed separately from the house.

No. Leasing with an option to buy is considered a
rental agreement so the home is ineligible. Once
you
(Revised November 2016)

3

Chapter 4.
Property

Qualified

Principal

Residence

5. I own the lot adjoining and contiguous to my
home. It has a different property identification
number than the parcel on which my principal
residence is located. May I also claim an
exemption on this property?

1. I have moved several times in the last year.
Which home do I claim?

You may claim an exemption on this property as
long as the property claimed is adjoining or
contiguous to your home. It must also be classified
residential or timber cutover and be unoccupied. A
road does not break contiguity. File a Principal
Residence Exemption (PRE) Affidavit, Form 2368
for each parcel.

You should claim the exemption on the property
you own and occupy as your principal residence on
the date you file the affidavit.
2. My home is on a 40-acre parcel classified as
residential. Are all 40 acres eligible for
exemption?
Yes. Your principal residence includes the entire
parcel that your home sits on, unless you rent part
of the land to another person or it is used for
business purposes.

6. I own two adjoining parcels and my house is
built on both parcels. May I claim both parcels?

3. I have a rural home on a 20-acre parcel. My
home is classified as residential property. I also
own the adjoining 80-acre residential parcel that
is unoccupied. What may I claim?

7. I own the parcel adjoining to my home. There
is a home on the adjoining parcel that I rent out.
May I claim an exemption on this parcel?

Yes.

No. The property does not qualify for a principal
residence exemption because it is not unoccupied.

You may claim an exemption on both parcels. The
80-acre parcel is unoccupied, classified as
residential, and is contiguous to the parcel that is
your principal residence, so you are eligible for the
exemption on both properties.

8. A taxpayer owns a residential lot next to a
principal residence. The adjacent lot contains a
cabin with electricity, a wood stove, and an
outhouse. It is primarily used for storage, but is
also used for shelter for two days during hunting
season. What percent exemption would that
parcel qualify for, and why?

4. Is it possible to receive an exemption on more
than one home?
Yes, but only for a limited period of time. If you
owned and occupied a new principal residence on
or before June 1 or November 1 and timely filed a
PRE Affidavit, Form 2368, you are entitled to a
PRE for that year's summer and/or winter taxes.
When you timely rescind the exemption on your old
property, it will not take effect until December 31st
of the year the rescind is filed. In addition, MCL
211.7cc(5), allows an owner to retain a principal
residence exemption on property previously exempt
as that owner’s principal residence for up to three
years if that property is not occupied, is for sale, is
not leased, and is not used for any business or
commercial purpose by filing a Conditional
Rescission of a Principal Residence Exemption,
Form 4640.
(Revised November 2016)

100%. The property is considered unoccupied.
9. I own and occupy my home and I am filing an
exemption claim for that home. I also own a
contiguous piece of property with a home on it
that my children occupy. May I also claim that
home?
No. Only your principal residence may be claimed,
even if your children do not pay rent.
10. What must be the classification of an
unoccupied, contiguous or adjacent property to
my principal residence that I own in order to
qualify for a principal residence exemption?
4

15. I live in a nursing home or an assisted living
facility and still maintain a home which is not
rented. I do not expect to return to the home.
Am I still entitled to a principal residence
exemption on my home?

It must be classified as either residential or timber
cutover.
11. My spouse and I each own and occupy
separate homes. We file our Federal and State
tax returns as married filing separately. May we
each claim our home?

No, because there is no expectation to return to your
former residence.

Yes. Spouses who maintain separate principal
residences may each claim his or her principal
residence unless they file a joint Federal and State
income tax return.

16. I own a condominium and a boat slip, which
have separate property identification numbers.
The common area for my condo adjoins the
common area of my boat slip. May I claim an
exemption for the boat slip?

12. My home is in a licensed trailer park. My
garage and shed are taxable. May I claim this
exemption for the garage and shed?

No. You do not own and occupy the common areas
of your condominium. Therefore the boat slip would
not qualify.

Yes.

17. If a person is in a nursing home and claims a
property tax credit on the nursing home, are
they still entitled to claim a principal residence
exemption?

13. How must a taxpayer’s home be classified to
qualify for exemption?
A home can be any classification as long as the
taxpayer owns and occupies it as their principal
residence.

No. A person may have only one principal
residence. Both the income tax credit and the
property tax exemption are based on the taxpayer’s
principal residence. Therefore if the taxpayer claims
one the other cannot be claimed.

14. I live in a nursing home or an assisted living
facility but still maintain a home. May I claim an
exemption on the home I own?

18. A person owns a property with two dwellings
on it; the second dwelling has water service but
no kitchen or bathroom. Should the exemption
be prorated?

In accordance with MCL 211.7cc(5), an owner who
previously occupied the property as his or her
principal residence but presently resides in a
nursing home or assisted living facility may retain
the exemption if he or she manifested an intent to
return to the property by satisfying all of the
following conditions:

Yes. If both structures are assessed as dwellings, the
exemption must be prorated based on the portion of
the taxable value of the property used as the
principal residence.

a). The owner continues to own the property
while residing in the nursing home or assisted
living facility,
b). The owner has not established a new
principal residence.
c). The owner maintains or provides for the
maintenance of the property while residing in
the nursing home or assisted living facility, and
d). The property is not occupied, is not leased,
and is not used for any business or commercial

19. An owner has an attached garage with an
upper level that was used for storage. The owner
converted the storage space to an apartment. Is
the owner still entitled to an exemption?
Yes, but not a 100% exemption. The owner is only
entitled to that portion of the taxable value of the

purpose.

(Revised November 2016)

5

22. In the diagram below, Lot A is a qualified
principal residence exemption property. Lot B is
owned by the owner of Lot A and is classified
residential, and the building is assessed as a
garage. Is Lot B eligible for an exemption under
the rules of contiguity?

property used as the principal residence of that
owner.
20. An owner owns property in a resort/lake
area. The owner occupies the home the majority
of the year but rents it out during the summer
and takes an apartment in town. Is the owner
entitled to a 100% principal residence
exemption, a reduced exemption, or no
exemption?

Yes. Contiguity is not broken by a road, a right of
way, or property purchased or taken under
condemnation proceedings by a public utility for
power transmission lines if the two parcels
separated by the purchased or condemned property
were a single parcel prior to the sale or
condemnation. See example below.

The burden of proof is on the taxpayer to prove
eligibility for the PRE. Whether or not a person
occupied a property as their fixed, permanent home
is looked at on a case-by-case basis in these
situations.

Diagram II

Home

A. Contiguous may touch contiguous. In the
diagram below, if the owner of Lot A owns both
Lot B and Lot C, and Lot A is qualified for a
principal residence exemption, and both lots B
and C are classified residential or timber cutover
and unoccupied (unoccupied means no habitable
dwelling) then Lot C is contiguous to Lot A
through Lot B.

Lot B

R
O
A
D

Garage

23. In Diagram II, Lot B be is contiguous to Lot
A. Would the owner qualify for exemption if
there were an apartment in the garage?
No. The property would not be considered
unoccupied.

Diagram I
Lot A

Lot B

Lot A

21. Does contiguous mean that there must be a
common boundary, or can contiguous touch
contiguous?

Lot C

24. Is a contiguous parcel considered eligible for
a principal residence exemption if it has a
residence on it that is only being used for
storage?

Home

B. If Lot B is not classified as residential or timber
cutover, or if B has a habitable dwelling, then Lot B
does not qualify and Lot C would no longer be
contiguous and would not qualify.

If the only use of the structure on the property is for
storage purposes and the structure is not habitable,
the taxpayer may qualify for a principal residence
exemption. The taxpayer has the burden to show
that the property is unoccupied.
25. My wife and I own two homes in Michigan;
our main home in southeastern Michigan and a
cottage up north. In March 2004, we decided to
put the southeastern Michigan home up for sale
and live at our cottage up north. We listed the
house with a realtor, rescinded the principal
residence exemption on the house, and moved to

(Revised November 2016)

6

our cottage. We requested, and received, a
principal residence exemption on our cottage.
We have not been able to sell our other home
and plan to move back there in March of 2005.
Can we rescind the exemption on our cottage,
and reclaim the exemption on our other home in
2005?

Principal Residence Exemption (PRE) Affidavit,
Form 2368.
2. I provide childcare in my home. Do I need to
complete line 12 of the Principal Residence
Exemption (PRE) Affidavit, Form 2368?
No. You may claim your entire home as a principal
residence. This also applies to owners that provide
care to foster children.

No. MCL 211.7cc(2)(e) prohibits the reclaiming of
rescinded exemptions when property ownership has
not changed, and either of the following conditions
are met:

3. I rent a room in my home to a boarder. May I
still claim an exemption?

A. That person has claimed an exemption under
this section for any other property for that tax
year.
B. That person has rescinded an exemption under
this section on other property, which exemption
remains in effect for that tax year, and there has
not been a transfer of ownership of that
property.

Yes. If more than 50 % of your home is used as
your principal residence, you may claim an
exemption for your entire home. If you use 50
percent or less of your home as a principal
residence, enter the percentage of your home that
you occupy on line number 12 of the Principal
Residence Exemption (PRE) Affidavit, Form 2368.

Therefore you are not eligible for a principal
residence exemption on your southeastern Michigan
home in 2005 since the principal residence
exemption you were granted on your cottage
remains in effect until December 31, 2005.

4. My mother lives in my home in a separate
area, but does not pay rent. Is her living area
part of my principal residence?
If your mother’s area has a separate entrance and
does not have an adjoining entrance to your living
area, then her living area is not part of your
principal residence and is not eligible for this
exemption. If there is a common entrance, question
3 applies.

26. My wife and I own our home in southern
Michigan and we own a cottage up north.
Because of the high price of lake front property,
our cottage is now worth more than our home.
Can we transfer our principal residence
exemption to the cottage? We would still only be
claiming one exemption.

5. I own a duplex and live in one unit. My father
lives in the other unit, but does not pay rent.
May I claim an exemption on both units?

No. The principal residence exemption only applies
to the property you own and occupy as your
principal residence.

No. You may claim an exemption only on the unit
you occupy as your principal residence even if there
is an adjoining entrance between the units.
Complete number 12 of the Principal Residence
Exemption (PRE) Affidavit, Form 2368.

Chapter 5. Multi-Purpose Property
1. I live in part of my home and operate a
business in another part. May I claim an
exemption?

6. I own a duplex and occupy both halves; can I
get a 100% principal residence exemption?
No. A duplex is assessed as a multiple unit
dwelling. An owner may occupy part or the entire
dwelling but is only entitled to an exemption on one
unit. A duplex, or any other multiple-unit dwelling,

Yes, you may claim a partial exemption even if the
property is classified commercial, but only on the
portion that is owned and occupied as your
principal residence. Complete line 12 of the
(Revised November 2016)

7

is assumed to have the additional units for the
purpose of renting or leasing them out. It is a
business property. Because one unit of the duplex,
or one or more units in a multiple unit dwelling is
unoccupied, does not change the essential nature of
the dwelling. If an owner is using both units of a
duplex as a personal principal residence, then the
owner needs to get the dwelling reclassified as a
single family dwelling in order to be eligible for a
100% principal residence exemption.

of the property’s common areas.
Chapter 6. Cooperative Housing Corporations
1. I am a shareholder in a cooperative housing
corporation. May I claim the exemption?
Shareholders in a cooperative housing corporation
may qualify for the principal residence exemption.
Your claim should be filed with the cooperative.
The cooperative must then compile information and
file an affidavit with the local assessing unit.

7. If there are two separately owned homes on
the same parcel, not split, which gets the
exemption?

2. Is a cooperative housing corporation eligible
for the principal residence exemption? What
must be filed?

If one of the owners was also the owner of the
parcel, that owner would be entitled to a partial
exemption based on the portion of the property he
or she occupied as their principal residence. The
owner of the other home would not be entitled to an
exemption. If both owners were on the deed, then
each would be entitled to partial exemption, based
on the relative values of the dwellings. The
combined exemption should total 100%.

A cooperative housing corporation is entitled to a
full or partial exemption. They must file the
following:
A. Principal Residence Exemption (PRE) Affidavit,
Form 2368.
B. A statement of the total number of units owned
by the cooperative housing corporation and
occupied as the principal residence of a tenant
stockholder.
C. A list that includes the name, address, and social
security number of each tenant stockholder of
the cooperative housing corporation occupying
a unit in the cooperative housing corporation as
his or her principal residence.
D. A statement of the total number of units of the
cooperative housing corporation on which an
exemption under this section was claimed and
that were transferred in the tax year immediately
preceding the tax year in which the filing under
this section was made.

8. If a house is 60% owner occupied, and 40%
tenant occupied, what percentage is allowed?
A single family dwelling used as the principal
residence of the owner, where less than 50% of the
total square footage is rented as the principal
residence of the tenant, is entitled to a 100%
exemption.
9. I own an 8-unit apartment building classified
as commercial property and one unit is my
principal residence. May I claim an exemption
on my unit?
Yes. Complete number 12 on the Principal
Residence Exemption (PRE) Affidavit, Form 2368.

Chapter 7. Estates and Trusts

10. I operate a bed and breakfast. May I claim a
principal residence exemption?

1. If a home has been placed in a grantor trust,
who should sign the Principal Residence
Exemption (PRE) Affidavit, Form 2368?

The owner is entitled to a portion of the principal
residence exemption based upon the square footage
of the property used exclusively as that owner’s

The grantor is considered the owner and should sign
the Principal Residence Exemption
(PRE)
Affidavit, Form 2368.

principal residence and 50% of the square footage

2. What if the grantor is unable to sign the

(Revised November 2016)

8

Principal Residence Exemption (PRE) Affidavit,
Form 2368?

spouse lives in another state and one of the adult
children of the decedent who lived with the
decedent continues to occupy the home. May the
occupant claim the exemption?

The trustee may sign on the grantor’s behalf.
Complete the form using the grantor’s name and
social security number.

No. Since the owner of the home, the life
beneficiary, does not occupy the home as a
principal residence, neither the owner nor the
occupant may claim an exemption.

3. As the beneficiary of a trust, when are you
considered eligible for a principal residence
exemption?

8. A trust agreement gives the trustee discretion
to distribute the home to any of the beneficiaries
or to sell the home and distribute the proceeds to
the beneficiaries. One of the beneficiaries
occupies the home as a principal residence and
continues to live there while the home is being
sold by the trust. May the beneficiary/occupant
claim an exemption?

Upon the death of the grantor of the trust, provided
you occupy the property as your principal
residence.
4. The deceased owner of the principal residence
had a will specifying that the person who was
occupying the principal residence was to inherit
it. May the beneficiary claim an exemption?

Yes, see question 3 of this section.

Yes, the beneficiary must file a Principal Residence
Exemption (PRE) Affidavit, Form 2368. For
purposes of the exemption, the beneficiary is
considered the owner upon the death of previous
owner.

9. The decedent co-owned the home, but the
decedent’s interest was placed in a revocable
trust, which is now irrevocable. The surviving
joint owner continues to occupy the home, but is
not one of the decedent’s beneficiaries. May the
surviving joint owner file an exemption?

5. The owner of the principal residence died
before the filing date without a will, but had only
one heir who occupies the home as his/her
principal residence. May the beneficiary claim
an exemption?

Yes. Since the surviving joint owner co-owns and
occupies the property, he or she may claim an
exemption.

Yes, see question 4 of this section.

10. A trust was created by a decedent’s death
before the filing deadline. Three properties were
transferred to the trust. Two of the children are
life beneficiaries and occupy the homes they
inherited. The third home is unoccupied and is
being sold. May the trustee file a claim for the
home, which is for sale, on behalf of the trust?

6. The owner of the principal residence died.
Before his/her death, the owner placed the
property in a revocable trust that specified that
the surviving spouse was a life beneficiary. The
surviving spouse occupies the home as a
principal residence. Can he/she claim the
exemption?

No. The trust cannot occupy the home as a principal
residence. The life beneficiaries may claim their
respective home, which they occupy as their
principal residences.

Yes. Upon the death of the grantor of the trust, the
life beneficiary is considered the owner of the home
and may claim a principal residence exemption on
the property.

11. I have placed property in an irrevocable,
qualified personal residence trust. The property
will be my children’s in 20 years. The property is
my principal residence. May I claim a principal
residence exemption on this property?

7. The surviving spouse is the life beneficiary of a
decedent who died. The decedent transferred the
home to the trust before death. The surviving
(Revised November 2016)

9

December 31 of the year in which the change or
sale took place.

Yes. The Internal Revenue Service allows
individuals to place their personal residences in a
qualified personal residence trust. The individual
(grantor) must continue to occupy the property as a
personal residence.

2. When I file an exemption on my new
residence, what happens to the exemption on the
residence I sold?

As long as the home is the grantor’s principal
residence on the date the Principal Residence
Exemption (PRE) Affidavit, Form 2368 is filed, the
grantor may claim an exemption.

The exemption remains in effect until December 31
of the year you no longer own or occupy as a
principal residence. You must rescind your
exemption within 90 days of the date you no longer
either own or occupy the property as your principal
residence, whichever comes first.

12. A person that qualified for a principal
residence exemption, but did not file, dies. Can
the estate file on the owner’s behalf to recoup
taxes for prior years?

Chapter 8. Social Security Numbers

3. Treasury notified the assessor to deny an
exemption because a rescind was not filed;
however, a Principal Residence Exemption
(PRE) Affidavit, Form 2368 is on file for the
purchaser. Does the assessor have to deny the
exemption?

1. Can the State of Michigan require my social
security number? Will it be kept confidential?

No. If a valid affidavit is on file from the current
owner, do not deny the exemption.

The Department of Treasury has the legal authority
to use social security numbers for tax purposes.
Federal law prohibits the state or local
governmental units from releasing a social security
number
to
unauthorized
persons.
Local
governmental units may not use social security
numbers for any purpose other than to administer
the principal residence exemption.

4. What happens if a lender foreclosed on a
mortgage?

Yes.

Although the owner/mortgagor is considered an
owner through the redemption period, the PRE does
not automatically remain on the property until the
redemption period ends. The owner/mortgagor must
continue to occupy the property as a principal
residence during the redemption period to continue
to qualify for the PRE. If the owner/mortgagor no
longer occupies the property as a principal
residence during the redemption period, a Request
to Rescind Principal Residence Exemption, Form
2602, must be filed and the PRE would be removed
on the December 31st in the year in which the
property is no longer occupied by the
owner/mortgagor as a principal residence.

2. Will I receive the principal residence
exemption if I do not enter my social security
number?
The Department of Treasury may deny a claim if an
owner refuses to provide his or her social security
number on written request from the Department of
Treasury.

1. What is a rescission? When is the exemption
removed from the tax roll?

5. I am moving into a new home and converting
my current home to a rental property in
November. Do I have to rescind the exemption
on my current home?

The parcel qualified for exemption but has now
been sold or the use of the property has changed.
The exemption is removed from the tax roll on

Yes, within 90 days of moving. The exemption will
remain in place until December 31st of the year that
the use was changed from your principal residence

Chapter 9. Rescinding an Exemption.

(Revised November 2016)

10

to a rental property.

by a taxpayer?

6. Treasury may assess a $5.00 per day penalty
for failure to rescind an exemption. Is this
penalty optional and who will enforce it?

For any year that an exemption should have been
rescinded and was not, the exemption should be
denied.

Under MCL 211.7cc(5), as amended, the
Department of Treasury may assess $5.00 per day
penalty up to $200.00. This penalty applies to
transfers or changes of use that occurred on or after
October 1, 1994. The Department of Treasury may
waive the penalty under certain circumstances.

5. Can an appeal be made to the Board of
Review to overturn a denial?
No. The Board of Review has no authority to
overturn a denial. An appeal of denial of a principal
residence exemption issued by a county or a local
unit must be made to the Residential/Small Claims
Division of the Michigan Tax Tribunal. An appeal
of a denial issued by the Department of Treasury
must be made to the Department of Treasury,
Hearings Division.

7. When a divorce occurs, do new principal
residence exemption forms have to be filed?
As long as one of the owners still occupies the
home as their principal residence, and the original
affidavit was filed jointly, the property will still
qualify. The owner who no longer owns the
property should file a rescission form using their
information.

6. If an assessor does a local unit denial, can
he/she withdraw the denial?
No. Once a denial has been sent to the taxpayer, the
only way to overturn the denial is through the
appeals process with the Michigan Tax Tribunal.
The local unit may appeal to the Michigan Tax
Tribunal on the taxpayer’s behalf.

Chapter 10. Denials
1. What years may be denied using a Notice of
Denial (Form 2742 or 4075)?

7. What action should be taken when an assessor
discovers an exemption has been
carried
forward for several years without a Principal
Residence Exemption (PRE) Affidavit, Form
2368 having been filed?

Counties that have opted-in with the Department of
Treasury and local units may issue denials for the
current year and three immediately preceding years.
2. Is the exemption removed from the tax roll at
the time the notice of denial is done?

The assessor should deny the current year and up to
three prior years.

Yes.

8. Do denials occur only if a Principal Residence
Exemption (PRE) Affidavit, Form 2368 has been
filed? Can you deny a carryover?

3. Does the July or December Board of Review
have the authority to issue a Notice of Denial or
a rescission?

If an exemption is on the tax roll, then a denial can
be done to remove it from the tax roll.

The Board of Review may deny claims for a
principal residence exemption that are not on the
tax roll (new claims) and have not been previously
denied. The Board of Review may not deny an
existing principal residence exemption or issue a
rescission.

9. If a local unit or an opt-in county has doubts
about the legitimacy of a claim for a principal
residence exemption and the Department of
Treasury is unable to supply information
because of privacy considerations, should we
deny the exemption?
If you are unable to verify that the property being

4. What should be done when an exemption is
still on the tax rolls because it was not rescinded
(Revised November 2016)

11

claimed qualifies for a principal residence
exemption, you should deny the claim. The
taxpayer may appeal to the Residential/Small
Claims Division of the Michigan Tax Tribunal
within 35 days of the denial. An appeal to the
Michigan Tax Tribunal can be initiated by the
timely filing of a petition. The petition must be a
Michigan Tax Tribunal form or a form approved by
the Michigan Tax Tribunal. Michigan Tax Tribunal
forms are available at www.michigan.gov/taxtrib.
You can print the form (i.e., Petition for Denial of
Exemption for Principal Residence/Qualified
Agricultural) and mail the completed form to the
Michigan Tax Tribunal at PO Box 30232, Lansing,
MI 48909 or complete the form online and submit it
electronically, if provided for by the Tribunal.

supporting the claim on the owner’s behalf within
35 calendar days of the date the denial is issued.
The Department of Treasury will consider the
submitted information, but it is not treated as an
appeal.
3. If an owner’s exemption is reinstated as the
result of an appeal of a denial, how are refunds
issued?
The local or county treasurer in possession of the
tax roll issues the refund. The refund will include
any interest or penalty the owner paid on nonprincipal residence taxes and is issued within 30
days of the date notice is received. Refunds will not
accrue interest.

Chapter 11. Denial Appeals

4. If I request a hearing from the Department of
Treasury or the Michigan Tax Tribunal, does
that extend the period of time in which I may
pay my corrected tax bill with no penalty or
interest?

1. If my exemption is denied, may I appeal the
decision?
Yes. If the Department of Treasury denies your
principal residence exemption, you may request an
informal hearing with the Department of Treasury,
Hearings Division within 35 days of the denial. If
the Hearings Division upholds the denial, you may
appeal to the Residential/Small Claims Division of
the Michigan Tax Tribunal within 35 days of
Treasury’s Final Decision. If the county or local
unit denies your principal residence exemption, you
may appeal to the Residential/Small Claims
Division of the Michigan Tax Tribunal within 35
days of the denial. An appeal to the Michigan Tax
Tribunal can be initiated by the timely filing of a
petition. The petition must be a Michigan Tax
Tribunal form or a form approved by the Michigan
Tax Tribunal. Michigan Tax Tribunal forms are
available at www.michigan.gov/taxtrib. You can
print the form (i.e., Petition for Denial of
Exemption for Principal Residence/Qualified
Agricultural) and mail the completed form to the
Michigan Tax Tribunal at PO Box 30232, Lansing,
MI 48909 or complete the form online and submit
electronically, if provided for by the Tribunal.

No. A request for hearing does not extend your
payment period for any supplemental taxes. In
addition, interest continues to accrue during the
appeal process.
5. What happens with land divisions that create
parcels that end up with prior taxes due because
of principal residence exemption errors?
The owners should be re-billed using appropriate
parcel identification numbers.
Chapter 12. Board of Review
1. What may be appealed to the Board of Review
(BOR)?
An owner who owned and occupied a principal
residence on May 1 for taxes levied before January
1, 2012 for which the exemption was not on the tax
roll may file an appeal with the July board of
review or December board of review in the year for
which the exemption was claimed or the
immediately succeeding 3 years. For taxes levied
after December 31, 2011, an owner who owned and
occupied a principal residence on June 1 or
November 1 for which the exemption was not on

2. May a local unit assessor or treasurer, or a
county treasurer appeal a denial issued by the
Department of Treasury on the taxpayer’s behalf?
No. They may, however, submit written information
(Revised November 2016)

12

the tax roll may file an appeal with the July board of
review or December board of review in the year for
which the exemption was claimed or the
immediately succeeding 3 years.

Department of Treasury with the reasons for denial
so the Department of Treasury may formally deny
the exemption. The Board of Review may not
deny an existing principal residence exemption.
However, claims for principal residence exemption
that are not on the tax roll (new claims) and have
not previously been denied may be appealed to the
Board of Review.

2. If I filed my affidavit timely, but my local
government misplaced my form, may I appeal?
Yes. You may appeal to the local Board of Review
during the year of the claim or the next succeeding
3 years. You may appeal by mail or in person by
submitting a claim for exemption. (Example: A
claim for exemption in 2010 may be appealed to the
July or December Board of Review in any year
from 2010 to 2013.)

6. May the assessor appeal to the July or
December Board of Review without an affidavit
from the owner?
An appeal to the July or December Board of
Review may be done in person or in writing.
However, to appeal to the board for a principal
residence exemption, the owner must complete and
submit Form 2368, Principal Residence Exemption
Affidavit. If the assessor has an affidavit which was
not posted to the tax roll in either the current year or
3 preceding years, it may be presented to the July or
December Board of Review as a written appeal.

3. If a property owner wishes to appeal to the
December Board of Review, by what date must
the local assessor’s office receive the appeal?
The appeal must be received at least 5 days prior to
the date the Board of Review is set to convene.

7. A taxpayer inquires at the local assessor’s
office as to why they did not receive their 2000
principal
residence
exemption.
Upon
researching, the assessor finds out that he was
supposed to take the request to the December
2003 Board of Review, but did not. What can the
local assessor do to correct the error or
omission?

Contact the local assessor’s office for date and
times.
4. May a township convene a Board of Review in
July to consider principal residence exemption
appeals when no summer tax is levied?
In STC bulletin #15 of 1997, the State Tax
Commission gave the following answer: At the July
board of review, a local unit may consider appeals
of principal residence exemptions and qualified
agricultural property exemptions, which were not
on the tax roll even if the unit does not have a
summer tax. The State Tax Commission
recommends that all assessing units hold a July
board of review, even if there is no summer levy of
local school operating taxes, if there is principal
residence or qualified agricultural property
exemption business.

There is no legislation that would allow anything to
be done for the 2000 tax year. Principal residence
exemptions may not be taken to the Board of
Review as an error or omission.
8. Can principal residence exemption issues be
addressed at the March Board of Review?
No. Principal residence exemption issues can only
be addressed at the July and December Boards of
Review.

5. May the local assessor or Board of Review
deny an existing principal residence exemption?

9. If the owner disagrees with the decision of the
Board of Review to deny a principal residence
exemption claim that was not on the tax roll, does
the owner have any further avenues for appeal?

Starting in 1995, if the local assessor has reason to
believe that a principal residence exemption should
not be granted, the assessor must either deny the
exemption for the current year or provide the
(Revised November 2016)

The owner has the right to appeal the decision of
13

the Board of Review to the Department of Treasury
within 35 days of the board’s decision.

In order for the Department to bill the seller, the tax
collecting unit in possession of the tax roll must
submit a Request to Bill Seller Following a PRE
Denial, Form 4816, which can be found at
www.michigan.gov/PRE.

Chapter 13. Corrective Billing Procedures
1. How can the county treasurer prove the
taxpayer received the supplemental tax bill to
start counting the 60 days in which the taxpayer
may pay with no additional interest?

3. Would a denial call for an immediate change
of the tax roll, just as a Michigan Tax Tribunal
order does?
Yes. When a denial is issued, the assessor must
immediately change the tax roll, unless the assessor
is in possession of a valid claim filed by a subsequent
owner. The local or county treasurer, depending on
who has possession of the roll, must issue either a
corrected or supplemental tax bill for the additional
non-principal residence taxes within thirty days. See
question #4 in this section for additional information.

There is a premise that if a bill is placed in the
United States Postal System, the bill was received.
If the supplemental tax bill was mailed to the last
known address used to mail the taxpayer’s property
tax bills, then the burden of proof is on the taxpayer
to prove that the supplemental tax bill was not
received. Generally, the Department of Treasury
will allow a reasonable amount of time for delivery
by mail. The 35 days to request an informal
conference will begin on that date. Delays in United
States mail delivery that is not the fault of a
taxpayer will be allowed if substantiated by the
taxpayer. Acceptable proof includes the date of the
postmark on the envelope or proof that the denial
notice was mailed to an address other than the last
known address of the taxpayer at the time the denial
notice was mailed.

4. As the county treasurer, we were advised not
to bill taxpayers based on the Department of
Treasury’s denial listing without checking with
the local assessor first. How do we know when to
issue a supplemental tax bill?
There are four instances where the tax should not be
billed based on a Department of Treasury denial.
This information should come from the local
assessor or county equalization director. The four
instances are:

2. I purchased my home on May 16, 2011 and the
Department of Treasury denied the seller’s
exemption for 2010 and 2011 on June 13, 2011.
Am I responsible for the additional taxes on my
home?

A. The assessor has received a timely filed claim
for exemption from the buyer and the
Department of Treasury is denying the seller. Or
the assessor has received a timely filed claim
from the seller and the Department of Treasury
is denying the buyer.
B. The name on the denial notice does not match
the name on record for the owner indicating that
the parcel number or revenue share code could
be wrong.
C. The principal residence exemption is being
denied for property classified as agricultural and
an exemption for qualified agricultural property
has been claimed.
D. The property has been transferred to a bona fide
purchaser.

No. Under MCL 211.7cc, if the property has been
transferred to a bona fide purchaser before
additional taxes were billed to the seller as a result
of the denial of a claim for exemption, the taxes,
interest, and penalties shall not be a lien on the
property and shall not be billed to the bona fide
purchaser The local tax collecting unit in possession
of the tax roll notifies the Department of Treasury
who then assesses the owner who claimed the
exemption for the tax, interest, and penalties
accruing as a result of the denial of the claim for
exemption In other words, the seller is responsible
for all additional taxes, interest and penalties due
for years up to and including the year of the sale if
the purchaser is a bona fide purchaser.
(Revised November 2016)

There has to be communication between the local
assessor, local treasurer, and county treasurer. The
14

treasurers should verify information with the local
assessor before issuing a corrected or supplemental
tax bill as a result of a denial notice. If the
Department of Treasury issued the denial notice, the
county treasurer should submit a summary of the
action taken (i.e.: date billed, amount billed, reasons
for not billing, etc.)

information. If it is a bona fide purchase, the
required information should be included.

5. What information must be submitted to the
Department of Treasury with a bona fide
purchase?

Taxes can be billed on the same bill, but they must
be itemized. The taxpayer has the right to pay each
year separately.

In order for the Department of Treasury to bill,
please submit a completed Request to Bill Seller
Following a PRE Denial, Form 4816 and provide
the relevant deeds and information requested on the
Form 4816. The form can be found at
www.michigan.gov/PRE.

Chapter 14. Administrative Issues

10. When billings are issued, does each tax year
need to stand alone or can the denial be in 2003
and the tax bill be a combination of 2001, 2002
and 2003?

1. Can counties that have opted to audit their
own principal residence exemptions under MCL
211.7cc(10) operate only from the leads provided
by the Department of Treasury, or can they do
their own research and investigations?

6. Would a Quit Claim Deed with a good sales
price qualify as a bona fide purchase?

Counties may use their own resources to investigate
principal residence exemptions.

Yes. The sale must be an arms length transaction
for fair market value.

2. Where do I find principal residence exemption
forms?

7. The Department of Treasury has stated in the
past that a quit claim deed did not qualify as a
bona fide purchase. However, other state
information said the criterion was “valuable
consideration.” If a Quit Claim Deed included
“valuable consideration,” or a considerable dollar
amount, would that be considered a bona fide
purchase?

They are available at www.michigan.gov/PRE.
3. Do county treasurers or county equalization
directors have the authority to deny principal
residence exemptions?
Yes. Counties that have opted to audit their own
principal residence exemptions have the authority to
deny principal residence exemption claims for the
current year and the three immediately preceding years.

Yes, as long as the “valuable consideration” was
equal to the fair market value of the property.
8. How far back can a bona fide purchase be
billed for non-principal residence exemption
taxes?

4. What action should be taken if an assessor
discovers that a property was sold several years
earlier and the exemption was erroneously
carried forward?

For all years denied.

Deny the exemption if a valid affidavit is not on
file. An exemption may be denied for the current
year and up to three years prior.

9. When the assessor notifies the county
treasurer to bill the non-principal residence
exemption tax, should the assessor provide the
treasurer with the name of the purchaser?

5. If a 2001 tax year is denied and billed in 2004,
and the taxpayer does not remit payment prior
to the March 1, 2005, when does it become
delinquent?

Assessors should notify the county treasurer to bill
and give the applicable treasurer all available
(Revised November 2016)

15

The tax bill becomes delinquent on March 1, 2005,
the year after the tax bill was issued.

Browsing means to inspect confidential information
obtained from tax records for purposes other than
the administration of the principal residence
exemption.

6. When billing denials, should we also bill for
the 1% local administration fee that would have
been on the original tax bill?

13. Can principal residence exemption
information be used to process other work
within the office?

Yes. MCL 211.7cc does not effect the way other
fees or penalties are billed.

No.

7. If a county opted-in, do the local units within
the county lose their ability to deny principal
residence exemptions?

14. Is there a procedure for notifying the
Department of Treasury of employees that no
longer need access to confidential information
because of a change in duties, or because they
are no longer employed by the local unit or
county government?

No. Local units have the ability to deny principal
residence exemptions whether or not their county
opted-in.
8. Can a county that has opted-in deny
information regarding principal residence
exemptions to local units?

Provide a written statement to the Department of
Treasury, Disclosure Officer, that the person is no
longer an employee, or that the employee’s duties
no longer include the need to access confidential
information is sufficient.

When counties elected to opt-in, they took on
leadership in auditing principal residence
exemptions in that county. Best results would be
achieved with county and local officials working
together.

15. Would password protection for files be a
sufficient safeguard in lieu of signed
agreements?

9. When a county opts-in, will the procedure for
local units to gain confidential information be to
contact the county?

No.
16. If an assessor calls the county treasurer’s office
for information, how will the treasurer know if the
assessor has signed the disclosure form?

Yes. However, before the county can disclose
confidential information, the Department of
Treasury must have approved signed disclosure
form(s) on file for the person making the request.

The State will maintain a database of signed
disclosure agreements.

10. If my county decides not to opt-in, how does
that affect me as the local assessor?

Chapter 15. Other Questions

You will continue to audit the exemptions as before.

1. How will the principal residence exemption
affect my homestead property tax credit claim?

11. Define confidential information, be specific.

This program is separate from the Homestead
property tax credit claim (Form MI-1040CR or MI1040CR-2) filed with your state income tax return.
Do not file the Principal Residence Exemption
(PRE) Affidavit, Form 2368 with your state income
tax return. The exemption affidavit must be filed
with your township or city assessor so the property
tax rolls can be adjusted properly.

All information gained from income tax records,
(e.g., mailing address, filing status, residence status,
social security numbers, etc.).
12. What is browsing?

(Revised November 2016)

16

2. Is there an income limit for this exemption?

How to contact the Principal Residence
Exemption Unit:

No.

Michigan Department of Treasury
Principal Residence Exemption Unit
PO Box 30440
Lansing MI 48909
517-335-7487

3. On the bottom of the Principal Residence
Exemption (PRE) Affidavit, Form 2368, and the
Request to Rescind Principal Residence
Exemption, Form 2602, is a question for the local
governments, “What is the first year you will
post this exemption to the tax roll?” Do I enter
the first year an exemption was claimed on that
parcel of property by anyone, or the first year
that particular taxpayer claimed an exemption
for that property?

www.michigan.gov/PRE
These guidelines are published under Public Act
237 of 1994, P.A. 105 and P.A. 247 of 2003.

Enter the first year an exemption was claimed for
that parcel of property by the owner identified by
the social security number on the form.
4. If I file the Property Transfer Affidavit, Form
2766 upon purchase of my home, must I also file
Principal Residence Exemption (PRE) Affidavit,
Form 2368?
Yes, if it is your principal residence file both forms.
If the Principal Residence Exemption (PRE)
Affidavit, Form 2368 is not filed, you will not
receive the exemption. Failure to file the transfer
affidavit can result in a penalty of $5.00 a day up to
$200.00, plus any additional delinquent tax due.
5. May I list more than one parcel number on a
Principal Residence Exemption (PRE) Affidavit,
Form 2368?
No. A separate form is required for each property.
6. When a parcel is split, do taxpayers have to
file a new Principal Residence Exemption (PRE)
Affidavit, Form 2368?
Yes. New property numbers are assigned when a
parcel is split, or when a combination is done. If the
parcel still qualifies as a principal residence, a new
affidavit must be filed. If the old parcel number had a
principal residence exemption, it must be rescinded.

(Revised November 2016)

17