April 28th, 2011 7:36 AM by Eileen Denhard
May 1st is the deadline for all of your buyers from the past year to file for their homestead property tax credit. Many municipalities and city offices have now gone to a shorter work week because of budget restraints making tomorrow, April 28th their last date to file if the assessor’s office is closed on Friday. You may want to send out an APB to your past clients from last year or take the time to call them if you are not certain they filed immediately after closing. It’s a great way to touch base with your clients and get some referrals, too. Post it on your Blog, but get it up and running today so you help out your homeowners and the friends they refer before the office’s are closed on Friday. This may also be a great addition as a button on your website.
Filing your Principal Residence Exemption
1. Is there a filing deadline to request a Principal Residence Exemption?
Yes. The property owner must have filed a Principal Residence Exemption Affidavit, Form 2368, by May 1 of the year the exemption is being claimed.
2. Where can I get Form 2368?
The Residence Exemption Affidavit, Form 2368, and other principal residence exemption forms should be available from your local assessor or on the internet at www.michigan.gov/PRE.
3. What year’s taxes are affected by the principal residence exemption?
A valid affidavit, filed on or before May 1 of the year the exemption is being claimed, will reduce that year’s taxes.
4. If I was eligible for the exemption on May 1st, but did not file timely, may I still file my claim?
Public Act 105 of 2003 provides for an exemption to be filed by mail or in person at the July or December Board of Review for the year of the claim or the succeeding three years. To petition the Board of Review, you must submit a signed Form 2368. A petition to the December Board of Review must be made at least five days before the date of the Board of Review.
Example: A claim for exemption in 2003 may be brought to the July or December Board of Review in any year between 2003 and 2006.
5. I moved to a different home before the May 1 filing deadline. May I claim my new home?
Yes. If you purchase a new home and move into it before the filing deadline you may claim an exemption on the new home before the filing date. Form 2368 should be available at the closing or from your local assessor.
6. I moved to a different home after May 1. May I claim my new home?
No. Since you did not own and occupy the home before the filing deadline, you may not file a claim. However, the previous owner may have claimed the property and that exemption remains in effect until December 31. You may file a claim for your new home before May 1 of the following year by filing Form 2368.
7. I began construction on a new home in January and owned and occupied it as my principal residence by May 1, may I claim an exemption for the current year’s taxes?
Yes. If you own and occupy a dwelling as your principal residence by May 1, you may file a claim for exemption with your local unit of government by May 1.
8. May an assessor deny an erroneous claim for the current year exemption before the Board of Review meets so the tax bills are issued correctly?
Yes. Public Act 105 of 2003 states the assessor may deny a claim for exemption for the current year and for the three immediately preceding calendar years.
9. May a closing agent be held liable by a buyer or seller if the buyer isn’t granted a principal residence exemption because the closing agent did not provide the appropriate forms at closing, or did not submit their forms timely?
No. Closing agents are required to provide an affidavit and rescind form at closing. However, Public Act 415 of 1994 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 Form 2368, or fails to file the form with the local tax-collecting unit when requested to do so by the buyer or seller.
10. What are the qualifications to be able to appeal under Public Act 415?
The sale must have taken place after December 31, closing statement preparer didn’t properly present Form 2368 or if requested to do so. The buyers may appeal to Treasury within 30 days of their first notification that an exemption is not posted.
11. What information must be submitted with a Public Act 415 appeal?
A. Copy of warranty deed or land contract to verify ownership.
B. Copy of driver’s license, voter registration, or other documents to verify occupancy.
C. Completed Form 2368.
D. A letter indicating what years you are appealing.
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.
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, 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. Documentation needs to verify occupancy between the periods of January 1 to May 1 of each year.
3. I own two homes in Michigan. For which home do I claim exemption?
Claim the exemption for the home you occupy as your principal residence (see the tests in #2).
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 homeowner’s principal residence exemption if you meet all of the criteria below:
A. You are a resident of the State of Michigan (see#1).
B. You own and occupy the home as your principal residence (see #2).
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.
5. I own property in Michigan, but moved to another state and have established residency there. May I still claim my Michigan home?
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 deadline. Re- establishing 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.