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Conditional Rescission of PRE
On April 8, 2008, Governor Granholm signed House Bill 4215, enacting Public Act 96 of 2008, which amended 211.7cc of the General Property Tax Act, Public Act 206 of 1893. The amendment enables a person who has established a new principal residence to retain a PRE on property previously exempt as the owner's principal residence. The conditional rescission allows an owner to receive a PRE on his or her current Michigan 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.
To initially qualify for a conditional rescission, the owner must submit a Conditional Rescission of Principal Residence Exemption, Form 4640 to the assessor for the city or township on or before June 1 (beginning with the summer tax levy) or November 1 (beginning with the winter tax levy) of the first year of the claim. The owner must annually resubmit this form on or before December 31 to verify to the assessor that the property for which the PRE is retained is not occupied, is for sale, is not leased and is not used for any business or commercial purpose. Submit a separate Form 4640 for each exemption being conditionally rescinded. If the property was receiving a partial exemption, the partial exemption will be maintained during the conditional rescission.
When filling out Form 4640:
- Check the “Initial Request” box if this is the first year of the conditional rescission (on or before June 1 or November 1 of the year of the claim).
- Check the “Second Year Annual Verification” box if verifying the property still complies with the conditional rescission requirements for the second year (on or before December 31 of the year prior to the second year).
- Check the “Third Year Verification” box if verifying the property still complies with the conditional requirements for the third year (on or before December 31 of the year prior to the third year).
- Provide the applicable tax year of the conditional rescission.
For example, on October 1, 2012, the initial request for a conditional rescission, check the “Initial Request” box and enter tax year 2012. In the same example, to retain a PRE for a second year, resubmit this form by December 31, 2012, check the “Second Year Annual Verification” box, enter tax year 2013, and verify the conditional requirements are met for the second year. You must submit Form 4640 again by December 31, 2013 to retain a PRE for a third year, check “Third Year Annual Verification” box, enter tax year 2014, and verify the conditional requirements are met for the third year.
If the owner does not annually verify to the assessor, or the assessor finds the property does not meet these conditional requirements, the assessor shall deny the PRE on that property.