Principal Residence Exemption
A Principal Residence Exemption (PRE) is formerly known as ’Homestead’ and exempts homeowners primary residence from the tax levied by a local school district for school operating purposes up to 18 mills. Section 211.7cc and 211.7dd of the General Property Tax Act, Public Act 206 of 1893, as amended, addresses PRE claims.
To claim a PRE, the property owner must submit a Principal Residence Exemption (PRE) Affidavit, Form 2368, to the assessor in which the property is located. The deadline for a property owner to file Form 2368 for taxes is June 1 for the summer bill, and a second deadline of November 1 for the winter bill.
Normally, when you purchase a home, Form 2368 and other relevant principal residence exemption forms are provided by the closing agents (title company). There are many variables in determining eligibility for the exemption. The Guidelines of Principal Residence Exemption (PRE) book provides answers to a number of frequently asked questions.
When a person no longer owns or occupies the property as a principal residence, he or she must file a Request to Rescind PRE Affidavit (PRE), Form 2602, with the assessor in which the property is located to remove the PRE. The PRE will be removed from the local property tax roll by the assessor beginning with the next property tax year.
Failure to rescind a PRE may result in additional taxes, interest and penalties.
Under certain circumstances, a person may qualify for a conditional rescission which allows an owner to receive a PRE on his or her current Michigan property and on previous exempted property simultaneously for up to three years. To initially qualify for a conditional rescission, the owner must submit an owner’s Conditional Rescission of PRE Affidavit, Form 4640 to the assessor for the city or township in which the property is located on or before June 1 or November 1 of the first year of the claim. Conditional Rescission of PRE - Frequently Asked Questions.