Michigan homestead exemption: what it saves you and how to claim it

Last updated 2026-07-09

What is the Michigan homestead exemption?

Michigan calls its homestead benefit the Principal Residence Exemption, or PRE. It's not a flat dollar amount knocked off your assessed value the way some states do it. Instead, it exempts your home from the 18-mill school operating tax that every non-homestead property pays. ^[1]

That distinction matters. Michigan has two school tax rates: the operating levy (18 mills) and the debt levy. The PRE only removes the operating portion. Your home still pays school debt millage, which varies by district, but that's typically 1 to 5 mills.

Here's the practical effect. On a home with a $150,000 taxable value, 18 mills equals $2,700 in school operating taxes. Your PRE erases that line entirely. Most homeowners in mid-tier markets see $1,000 to $1,500 in annual savings. In higher-value markets like Ann Arbor or Birmingham, it can top $3,000. ^[2]

Separate from the PRE, Michigan's Constitution caps annual taxable value increases at 5% or the rate of inflation (whichever is lower) as long as you own the home. ^[3] That cap resets when you sell. The PRE and the cap work together, but they're two different machines doing two different jobs.

Who qualifies for the Michigan Principal Residence Exemption?

The rules are simpler than most states. To qualify, you must own the property (or be buying it on a land contract), occupy it as your principal residence, and not claim a homestead exemption on any other property in any state. ^[1]

There's no income threshold. No age requirement. No length-of-ownership waiting period. If you moved in January and closed in February, you can file immediately.

Land contract buyers can claim the PRE even though they don't hold the deed yet. Michigan Compiled Laws section 211.7cc specifically allows it. ^[1]

You can only have one principal residence. If you own a vacation cottage and a primary home, only the primary qualifies. Rental properties don't qualify at all. Rent out more than 50% of your home and the PRE is prorated based on the percentage you actually occupy. ^[1]

Trust-owned properties are a common snag. If your home is held in a revocable living trust and you're both the grantor and the trustee, you still qualify. Irrevocable trusts are harder. The Michigan Department of Treasury guidance says the beneficiary must occupy the property as their principal residence and hold a present interest in it. When in doubt, call your local assessor before you assume you're covered.

How much does the Michigan homestead exemption save you?

The savings depend on two numbers: your taxable value and the school operating millage in your district. Every Michigan district charges 18 mills for school operating taxes on non-homestead property. The PRE eliminates that 18-mill charge on your home. ^[1]

The math is straightforward. Taxable value (not state equalized value) times 0.018 equals your annual PRE savings.

Taxable Value	Annual PRE Savings (18 mills)
$75,000	$1,350
$100,000	$1,800
$125,000	$2,250
$150,000	$2,700
$175,000	$3,150
$200,000	$3,600

Remember: taxable value is not the same as your home's market value or even its state equalized value (SEV). Taxable value usually runs lower than SEV because of the annual cap on increases. You'll find your taxable value on your Notice of Assessment, which arrives every February. ^[2]

Michigan compares oddly to flat-deduction states. The Florida homestead exemption offers a flat $25,000 deduction from assessed value plus a second exemption for values between $50,000 and $75,000, which works out very differently depending on your market.

How do you file for the Michigan Principal Residence Exemption?

Filing is free and takes about ten minutes. You fill out Form 2368 (Principal Residence Exemption Affidavit) and submit it to your local township or city assessor's office. ^[4]

You can file in person, by mail, or in many counties online through the assessor's portal. The form asks for your name, property address, parcel number, the date you moved in, and a signature certifying you're not claiming a homestead benefit somewhere else.

Deadlines matter here:

• File by June 1 of the current year to get the exemption on that year's summer and winter tax bills. ^[4]
• File between June 2 and November 1 and the exemption applies to the winter tax bill only (you miss the summer bill).
• File after November 1 and the exemption doesn't take effect until the following tax year.

You only file once. The PRE stays in place as long as you own and occupy the home. You do not refile every year. The exemption terminates automatically when you sell or stop using the home as your principal residence, and you're supposed to file a rescission (Form 2602) when that happens. ^[4]

New construction buyers: your builder or title company may handle the filing at closing. Confirm they did. Don't assume.

What is the June 1 deadline and what happens if you miss it?

June 1 is the hard cutoff for getting the PRE on your summer tax bill. Michigan's summer taxes are billed around July 1 and cover the first half of the year's levy. If your form isn't in by June 1, you'll pay school operating taxes on that summer bill as a non-homestead property. ^[4]

Miss June 1 but file by November 1? You still get the PRE on your winter tax bill. You'll have paid one semester of non-homestead school taxes, but the exemption kicks in going forward.

Miss November 1 entirely? The exemption starts the following tax year. You've lost a full year of savings, which for most Michigan homeowners runs $1,000 to $3,000. You can't claw that back retroactively under normal circumstances.

There's one exception. If you can show a clerical error, you can petition the Michigan Tax Tribunal or your local Board of Review. But "I forgot" doesn't count as a clerical error. That relief avenue is narrow.

Here's my advice: file the day you close or move in. Don't wait until June. Title companies are supposed to remind you. They often don't. Set a calendar reminder for the first week you're in the house.

What is the Michigan taxable value cap and how does it work?

This is the other half of Michigan's homeowner protection, and it's separate from the PRE. Michigan's Proposal A, passed in 1994, amended the state constitution to cap annual taxable value increases at 5% or the rate of inflation (the CPI-U), whichever is lower. ^[3]

The State Tax Commission publishes the official inflation multiplier each year. For 2024, the cap held at 5.0% (inflation ran above 5%, so the 5% ceiling capped it). For 2023, it was 5.0% as well. For 2021, the multiplier was 1.014. ^[5]

When you buy a home, the taxable value resets ("uncaps") to the state equalized value as of the following January 1. That reset often produces a big jump in taxes the year after purchase, which blindsides a lot of buyers.

Once you own the home, the cap starts working for you again. Buy at $300,000 SEV, hold ten years in a rising market, and your taxable value can sit well below SEV. That gap is real money.

The cap doesn't help you if the assessor is overvaluing your property. That's a different problem, and you solve it by appealing the assessment. An inflated SEV uncaps to an inflated number when you sell. For DIY appeals on the assessment itself, the TaxFightBack appeal kit walks through the evidence-gathering process step by step.

Can you lose the Michigan PRE and how do you get it back?

Yes, you can lose it, and it happens more often than people expect. The Michigan Department of Treasury audits PRE claims. If auditors find you're claiming the exemption on a rental, a vacation home, or a property where you no longer live, they can deny or rescind the PRE. ^[6]

Denials also happen because of a data entry error at the assessor's office, a title issue, or a mismatch between your voter registration address and your property address.

Get a Notice of Denial and you have 35 days from the date of the notice to appeal to the Michigan Tax Tribunal. ^[7] Miss that window and you're in a much harder spot.

To contest a denial, you'll generally need:

• A copy of your filed Form 2368.
• Driver's license showing the property address.
• Voter registration at the property address.
• Utility bills, bank statements, or other mail at the address.
• Proof that you don't claim a homestead benefit elsewhere.

The Michigan Tax Tribunal handles these cases in its Small Claims division if the amount at issue is under a certain threshold. Filing the petition yourself is doable. The Tribunal has a self-help guide on its website. ^[7]

For how these appeals run in other states, the homestead exemption Ohio guide covers a similar administrative appeal track.

Are there additional Michigan property tax exemptions beyond the PRE?

Yes. The PRE handles school operating taxes for owner-occupants. Michigan has several other exemptions that stack on top of it depending on your situation.

Poverty Exemption (MCL 211.7u): If your household income falls below the federal poverty guidelines, you can apply for a full or partial exemption from all local property taxes. The application goes to your local Board of Review in March. Income limits track the federal poverty level and Michigan guidelines. ^[8]

Disabled Veterans Exemption: Public Act 161 of 2013 (as amended) exempts 100% totally and permanently disabled veterans from all local property taxes on their principal residence. Surviving unremarried spouses of qualifying veterans also qualify. ^[9] This one is big. A $200,000 taxable value property would otherwise pay several thousand dollars in local taxes a year.

Qualified Agricultural Property Exemption: Agricultural land that meets the statutory definition can also be exempt from the 18-mill school operating levy, similar in structure to the PRE.

Board of Review Hardship Appeals: Even outside the formal exemption categories, your local Board of Review in March can grant reductions based on individual hardship. These aren't guaranteed, but they're on the table.

These stack differently. A disabled veteran who also qualifies for the poverty exemption would apply for both. The PRE is the baseline exemption every owner-occupant should have. The others are targeted.

How does the Michigan assessment appeal process work?

The PRE is about which taxes apply to your home. The assessment appeal is about whether the value your assessor put on the property is accurate. Two different fights.

Every February, Michigan assessors mail a Notice of Assessment. It shows your state equalized value (SEV, which is supposed to be 50% of market value) and your taxable value. ^[2]

If you think the SEV is too high, the sequence is:

1. Informal review with the assessor. Call or visit before the Board of Review meets. Many assessors will correct obvious errors without a formal hearing. 2. March Board of Review. This is your local board, typically meeting the second week of March. You petition in writing and may appear in person or by letter. Residential petitions must be filed by the close of the first Monday in April (check your local schedule). ^[10] 3. Michigan Tax Tribunal. If the Board of Review denies your petition, you can appeal to the Tax Tribunal. For residential homestead property, the Small Claims division is the right track. The filing fee is small (around $30 to $300 depending on the claim). The petition deadline for most residential cases is July 31. ^[7]

You don't need a lawyer or an appraisal firm for any of this. Comparable sales (comps) from the Michigan MLS or public records are your best evidence. The assessor has to prove their value is correct at the Tribunal. You don't have to prove the market value is exactly X, just that theirs is too high.

For a detailed breakdown of gathering comp evidence, see the georgia homestead exemption guide for a comparable state-level walkthrough, or explore the TaxFightBack DIY appeal resources for Michigan-specific comp selection.

What happens to the PRE when you sell or rent your home?

When you sell, the PRE terminates. You're supposed to file Form 2602 (Request to Rescind Principal Residence Exemption) with the local assessor's office by the date you transfer the property. ^[4] Your real estate agent or title company should handle this at closing, but verify.

Don't rescind, and if the new owner also claims the PRE, there's technically a brief overlap. The system catches this fairly quickly during annual audits.

Convert your home to a rental and the PRE must be rescinded right away. Michigan takes this seriously. If Treasury auditors find you've been claiming the PRE on a rental property, they can impose back taxes going back three years plus a 20-mill penalty. ^[6] That's the non-homestead rate (18 mills) plus an added penalty, applied retroactively. The bill gets large fast.

Temporary absence isn't automatic disqualification. If you move temporarily for work, medical care, or military service and intend to return, the PRE can stay in place. The IRS has some analogous rules around intent for a primary residence, but Michigan's standard is state-specific. Document your intent to return and keep the property off the rental market.

Seasonal absence (snowbirds spending winters in Florida) is also fine as long as Michigan is your primary domicile and you're not claiming a homestead benefit in the other state. You can't claim both.

How does the Michigan PRE compare to homestead exemptions in other states?

Michigan's approach is distinctive. Most states give a flat dollar deduction from assessed value. Michigan removes an entire tax rate from one category of taxes. Both approaches save money. They just work differently.

State	Type of Benefit	Approximate Annual Savings	Income Limit?
Michigan	18-mill school operating exemption	$1,000-$3,600 (varies by taxable value)	No
Florida	$25,000-$50,000 assessed value deduction	$500-$1,000+ (varies by millage)	No
Ohio	Reduction in assessed value for seniors/disabled	Varies	Yes (income-based)
Texas	$100,000 homestead exemption from school taxes	$1,000-$2,500+	No
Georgia	$2,000 base exemption, more for seniors	$200-$400 base; more for seniors	Varies

The homestead exemption pa program uses yet another structure, with a homestead exclusion calculated from a formula tied to local earned income tax revenue.

Michigan's no-income-limit structure is genuinely generous for working-age homeowners. States like Ohio aim benefits at seniors and low-income owners. Neither approach is objectively better. They reflect different policy choices about who needs protection most.

Where can you find your local assessor and Michigan PRE forms?

Michigan has 83 counties, each divided into townships and cities, and each of those has its own assessor. There is no single statewide filing portal. You find your local assessor through your county's official website or the Michigan Department of Treasury's resources.

Forms you'll actually use:

• Form 2368 (Principal Residence Exemption Affidavit): File this to claim the PRE. Available from the Michigan Department of Treasury website or your local assessor. ^[4]
• Form 2602 (Request to Rescind Principal Residence Exemption): File this when you sell or stop occupying the home.
• Form 5737 (Application for MCL 211.7u Poverty Exemption): For the hardship/poverty exemption through your local Board of Review.
• Form 5011 (Petition to Michigan Tax Tribunal): For appealing a PRE denial or an assessment to the Tax Tribunal. ^[7]

The Michigan Department of Treasury's property tax page has all these forms. Your county's equalization department can help identify your specific township or city assessor.

If you're in a city (Detroit, Grand Rapids, Lansing, Ann Arbor), the city assessor handles everything. If you're in an unincorporated township, it's the township assessor. The county equalization director is the fallback contact if you can't find your local assessor.

For comparison, see how ny property taxes handles its STAR exemption, which is also managed at the local level but with state oversight.

Frequently asked questions

Do I have to refile the Michigan Principal Residence Exemption every year?

No. You file Form 2368 once when you move in, and the PRE stays on your property as long as you own and occupy it as your principal residence. You only need to act again when you sell, stop living there, or receive a Notice of Denial from the assessor or Michigan Department of Treasury.

What is the deadline to file for the Michigan PRE?

File by June 1 to get the PRE on both your summer and winter tax bills for that year. File between June 2 and November 1 and you'll get it on the winter bill only. File after November 1 and the exemption starts the following tax year. Filing on or before your closing date is the safest approach.

How much does the Michigan homestead exemption save per year?

The PRE eliminates the 18-mill school operating levy on your home. On a taxable value of $100,000, that's $1,800 per year. On $150,000 taxable value, it's $2,700. Your taxable value is on your February Notice of Assessment. Multiply it by 0.018 to get your specific annual savings.

Can renters claim the Michigan Principal Residence Exemption?

No. The PRE requires ownership of the property (including land contract ownership). Renters do not qualify. The exemption belongs to the owner, not the occupant. If you're renting and worried about property taxes, your only real move is negotiating rent, not a PRE filing.

What happens if I buy a home and the previous owner had the PRE?

The PRE does not automatically transfer to you. You must file Form 2368 with your local assessor. Also, the taxable value 'uncaps' to the SEV the January 1 after your purchase, which often means a significant tax increase in your first full year. Budget for that jump.

Can I claim the Michigan PRE if my home is in a trust?

Yes, in many cases. If the property is in a revocable living trust and you're the grantor and trustee who occupies the home, you still qualify. Irrevocable trusts are more complicated. The Michigan Department of Treasury requires the beneficiary to have a present possessory interest and to occupy the home. Confirm with your assessor if your trust structure is unusual.

What is Michigan's poverty exemption and who qualifies?

Under MCL 211.7u, homeowners whose income falls below the federal poverty guidelines can apply for a full or partial exemption from all local property taxes, more than just school taxes. Applications go to the local Board of Review in March. Documentation required includes income tax returns and proof of assets. Each municipality sets its own specific income guidelines within the state framework.

How do I appeal a Michigan PRE denial?

You have 35 days from the date on your Notice of Denial to file a petition with the Michigan Tax Tribunal (Form 5011). Gather your Form 2368 filing confirmation, driver's license at the property address, utility bills, and any other proof of principal residence. The Tribunal's Small Claims division handles most residential PRE cases.

Does Michigan have an additional property tax exemption for disabled veterans?

Yes. Under Public Act 161 of 2013, veterans rated 100% totally and permanently disabled, and unremarried surviving spouses of qualifying veterans, are exempt from all local property taxes on their principal residence. This stacks on top of the PRE and is one of the most substantial property tax benefits Michigan offers.

Can I claim the Michigan PRE if I live in the home only part of the year?

Yes, as long as Michigan is your primary domicile and you aren't claiming a homestead exemption in another state. Seasonal absence (spending winters elsewhere) doesn't disqualify you. The key test is intent: is this your principal home, or is the other state your principal home? You can only claim one PRE across all states.

What is the difference between SEV and taxable value in Michigan?

State equalized value (SEV) is supposed to be 50% of your property's market value. Taxable value is what you're actually taxed on, and it's capped at annual increases of 5% or inflation (whichever is lower) while you own the home. After purchase, taxable value often runs well below SEV. Both figures appear on your February Notice of Assessment.

How do I find out if my Michigan PRE is currently active?

Check your tax bill. Your summer and winter property tax statements list your exemption status. If the school operating millage shows as taxable rather than exempt, your PRE may not be active. You can also call your local assessor or check your county's property lookup portal, which most Michigan counties maintain online.

Sources

1. Michigan Legislature, MCL 211.7cc (Principal Residence Exemption statute): Defines qualifying conditions for the PRE including owner-occupancy, land contracts, and the prohibition on claiming homestead benefits in more than one state
2. Michigan Department of Treasury, Property Tax: Describes the Notice of Assessment, SEV, and taxable value that homeowners receive each February
3. Michigan Constitution, Article IX, Section 3 (Proposal A, 1994): Caps annual taxable value increases at 5% or the rate of inflation, whichever is lower, with reset upon transfer
4. Michigan Department of Treasury, Form 2368 Principal Residence Exemption Affidavit: June 1 filing deadline for PRE to apply to current year summer and winter bills; Form 2602 required upon rescission
5. Michigan State Tax Commission, 2024 Inflation Rate Multiplier: The 2024 taxable value cap multiplier was 1.05 (5.0%), as inflation exceeded the 5% statutory ceiling
6. Michigan Department of Treasury, PRE Audit Program: Treasury can impose back taxes of 18 mills plus a 20-mill penalty retroactively up to three years for fraudulent PRE claims on rental properties
7. Michigan Tax Tribunal, Self-Help Resources and Petition Filing: 35-day appeal window from Notice of Denial; Small Claims division handles residential PRE appeals; July 31 deadline for most residential assessment appeals
8. Michigan Legislature, MCL 211.7u (Poverty Exemption statute): Authorizes local Boards of Review to grant full or partial property tax exemptions for homeowners whose income falls below federal poverty guidelines
9. Michigan Legislature, Public Act 161 of 2013 (Disabled Veterans Exemption): Exempts 100% totally and permanently disabled veterans and their surviving unremarried spouses from all local property taxes on their principal residence
10. Michigan State Tax Commission, Assessment Administration Bulletin: Residential assessment appeal petitions to the local Board of Review must be filed by the close of the first Monday in April in most jurisdictions