Conditional Recission Deadline Extended
On April 8, 2008, Governor Granholm signed House Bill 4215, enacting Public
Act 96 of 2008, which amended Section 211.7cc of the General Property Tax Act of
1893. The amendment enables a person who has established a new principal
residence in Michigan to retain a Principal Residence Exemption (PRE) on
property previously exempt as the owner's principal residence (if the property
is not occupied, is for sale, is not leased and is not used for any business or
commercial purpose) by submitting a
Conditional Rescission of Principal Residence Exemption
Form #4640. The deadline for the form submission was May 1, 2008, for
the 2008 tax year. Any homeowner who missed the May 1st deadline for the 2008
tax year may now file an appeal with their community's July or December 2008
Board of Review. Individuals should contact local assessors for meeting dates
and additional information on the conditional rescission of a PRE.
The conditional rescission allows an owner to receive a PRE on his or her
property and on previously exempted property simultaneously if certain criteria
are met. An owner may receive the PRE on the previous 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. Please see Conditional
Rescission of
Principal Residence Exemption (PRE) Frequently Asked
Questions for additional information.
The Principal Residence Exemption Program, formerly known as the Michigan Homestead Exemption Program, allows homeowners an exemption from their local School Operating Millage. In accordance
with Public Act 237 of
1994, homeowners that occupy their property as their principal
residence may exempt up to 18 mills.
The
Principal Residence Exemption (PRE) Active Duty Military Affidavit, Form 4660,
enables a person with an established PRE to retain that PRE while on active
military duty in the United States armed forces if the principal residence is
rented or leased.
General information regarding the Principal Residence Exemption Program is
listed below. If you have further questions, you may contact the Principal
Residence Exemption Unit at
(517) 373-1950.
Normally, when you purchase a home, the property
owner files a Principal Residence Exemption Affidavit, Form
2368, with the township or city assessor. The exemption information
is then posted to the local property tax roll.
In many cases, the State or local unit of government may perform
administrative audits of Principal Residence Exemption records. The complete
process is outlined below.
For information about the recently mailed audit
notices and questionnaires from the Department of Treasury, you may contact the
Principal Residence Exemption Audit Call Center at (888) 909-2799 between the
hours of 9 a.m. and 5 p.m. Monday through Friday. This call center is set up to
answer questions about the recently mailed audit letter and questionnaire only.
Please contact the Principal Residence Exemption Unit at (517) 373-1950 for
all other questions.
This program is separate from the Homestead
Property Tax Credit, which is filed annually with your Michigan
Individual Income Tax Return.
Principal Residence Exemption Guidelines
Step 1 - Principal Residence Exemption Records Review
Step 2 - Denial of Principal Residence Exemption
Step 3 - Opportunity For Homeowners To Appeal Denial
Step 4 - Adjusted Property Tax Bills for Denied Exemptions
Other Helpful Information
|
Step 1: Principal Residence Exemption Records Review |
Periodically, the Department of Treasury may
contact the homeowner to request information to verify that the property under
review was occupied as the principal residence for the year(s) in question. Your
Social Security number is used to verify the tax exemption claim and to deter
fraudulent filings.
Principal
Residence Exemption Audit Questionnaire
Common reasons for the Department to request
more information are:
- Failure to rescind an exemption when the
property is sold. See Request to Rescind Principal Residence
Exemption, Form
2602.
- The property in question was not a principal
residence during the years in question.
- The homeowner is filing their annual income
tax returns from an address other than the address of their principal
residence.
If
you receive a letter from the Department of Treasury requesting more
information, it is important that you respond in writing with the requested
documentation within 30 calendar days of the date on the letter. Failure to
respond may result in denial of your Principal Residence Exemption.
View
a list of documents that can be used to verify residency.
Once documentation has been received, Treasury
will make a determination about the status of the Principal
Residence Exemption for the property involved. This could take several months
depending on the number of reviews currently underway.
If the exemption is verified, you will not
hear from Treasury again regarding the specific years and property
identified.
FAQs
about Principal Residence Review of Records
|
Step 2: Denial
Of Principal Residence Exemption |
You will receive a "Denial of Principal Residence Exemption" letter if:
- You fail to respond to Treasury's letter
requesting information about the occupancy of the property as your principal
residence.
-
If you did not receive the "Request for
Information" letter, it may be that Treasury has an old address on file
(addresses are taken from the last tax return filed).
FAQs Denial of Principal Residence Exemption
|
Step 3:
Opportunity To Appeal Denial |
If you disagree with the Denial of Principal Residence Exemption:
- Submit a written appeal within 35 days of
the date on the "Notice of Denial" letter. Include a copy of
the letter (or include the property parcel identification number, your
name, address and Social Security number in your response) and state you
are requesting an informal conference along with the reason you disagree
with the denial.
- Include documentation that shows you had occupancy
between January 1 and May 2 for each of the year(s) being claimed.
View
a list of documents that can be used to verify residency.
If your appeal is filed timely you
will receive a
letter confirming that your appeal has been received. It may take several
months to complete the review of the appeal. If your documentation shows the
property was occupied as your principal residence, the denial will be removed
for the year(s) in question. If the denial is not removed, you will receive a
"Notice of Informal Hearing" from the Department of Treasury.
FAQs
Appealing a Denial of Principal Residence Exemption
|
Step 4: Adjusted
Property Tax Bills For Denied Exemptions |
If you owned the property during the
time for which the denial was issued, you will owe additional property
taxes. If you did not own the property for the year(s) being denied,
you will not owe additional taxes.
The treasurer in possession of the tax roll is
required to issue a corrected or supplemental bill. If the property has been
sold, the treasurer will send the information to the Department of Treasury
and Treasury will issue a billing for the additional taxes due. If you still
own the property, the local or county treasurer will compute the additional
taxes and issue the billing. Generally, the amount due would be 18 mills
or $18 for each $1,000 of taxable value, plus any penalty and interest.
FAQs
Adjusted Property Tax Bills
|
Other
Helpful Information |
Definition of Principal Residence Exemption
How to Appeal a Denial of Principal Residence Exemption
Acceptable Verification of Residency for Exemption
Frequently Asked Questions
Principal Residence Review of Records
Denial
of Principal Residence Exemption
Appealing
a Denial of Principal Residence Exemption
Adjusted
Property Tax Bills
|
Definition
of Principal Residence |
Factors to be considered in determining a principal residence include where taxpayers keep their most important
possessions, house their family, vote, maintain club and lodge memberships, buy
automobile licenses, maintain a mailing address and banking location, operate a
business, or sue for divorce. However, no one of these factors is controlling.
|
How to
Appeal a Denial of Principal Residence Exemption |
If you disagree with the Denial of
Principal Residence Exemption:
- Submit a written appeal within 35 days of
the date on the "Notice of Denial" letter. Include a copy of the
letter (or include the property parcel identification number, your name,
address and Social Security number in your response) and state you are
requesting an informal conference along with the reasons you disagree with
the denial.
- The documentation you submit must show that
the property was occupied as your principal residence for the year(s) in
question. Please submit documentation that is dated between January 1
and May 2 for each of the years listed on the letter.
View
a list of documents that can be used to verify residency.
If you have never
owned this property, or if the information on the letter is incorrect, please
make the corrections on the letter and return it to the Department of
Treasury.
|
Acceptable
Verification of Residency for Exemption |
Documentation
must show that the property was occupied as your principal residence for the
year(s) in question. Copies of documentation must be dated between January 1
and May 2 for each of the years in question. Some examples of verifying
documentation are:
- Both sides of your driver's license with
property address
- Your voter's registration record
- A cancelled check showing the property
address. Please black out any information other than the address and the date the check was written.
- A statement from a bank, charge account, medical billing, etc. Only the portion showing your address and date need be submitted.
- Your income tax return showing the mailing address.
- An insurance policy. Only the portion showing your address and date need be submitted.
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