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Claim Requirement

Claim Requirement

Overview

This section explores the claim requirement for a principal residence exemption under MCL 211.7cc. It examines statutory definitions, case law interpretations, and practical implications for property owners, assessors, and legal practitioners.

If an owner meets all requirements for the principal residence, to receive the principal residence exemption, the owner must claim the principal residence exemption. To claim a principal residence exemption, a person must complete and file a Principal Residence Exemption Affidavit (Form 2368) with the Assessor for the city or township in which the property is located. (MCL 211.7cc(2)).

Do not file a Principal Residence Exemption Affidavit (Form 2368) if the property is not your principal residence or you do not meet eligibility requirements. Filing a false claim can result in perjury charges, up to one year in jail, fines of between $1,000 to $5,000, and public service of 500 to 1,500 hours of public service. (MCL 211.120). Additionally, the principal residence exemption claim would be denied leading to significant taxes and interest owed.

The deadlines for a property owner to file a Principal Residence Exemption Affidavit (Form 2368) are on or before June 1 (for the summer tax levy) or on or before November 1 (for the winter tax levy).  A valid Principal Residence Exemption Affidavit (Form 2368) filed on or before June 1 of the year the principal residence exemption is being claimed will reduce that year’s property taxes beginning with the summer tax levy. A valid Principal Residence Exemption Affidavit (Form 2368) filed at any time from June 2 through November 1 will reduce that year’s property taxes beginning with the winter tax levy. (MCL 211,7cc(2)).

The principal residence exemption remains on the property if the owner continues to meet eligibility requirements for the exemption. When the property is no longer the owner’s principal residence, a Request to Rescind PRE (Form 2602) must be filed within 90 days by the owner. Failure to file results in a $5 daily penalty (up to $200). Additionally, the principal residence exemption claim would be denied leading to significant taxes and interest owed.

The Principal Residence Exemption Affidavit (Form 2368), Request to Rescind PRE (Form 2602) and related forms can be obtained from closing agents, local assessors or online at www.michigan.gov/PRE . Closing agents are not legally liable if they fail to provide or file these forms. (MCL 211.7cc(18)).

Claim Scenarios: Frequently Asked Questions

  1. Chris co-owns Blue Acre with his children, Jane and Jack, but only Chris occupies the property as a principal residence. Do all owners need to sign the Principal Residence Exemption Affidavit (Form 2368)?
    No. Only Chris, the occupying owner, should sign the Principal Residence Exemption Affidavit (Form 2368). Jane and Jack do not qualify for the exemption and should not sign the Principal Residence Exemption Affidavit (Form 2368).
  2. If a property is owned by a trust, who should complete and sign the Principal Residence Exemption Affidavit (Form 2368)?
    The grantor or beneficiary who occupies the property as their principal residence should complete and sign the Principal Residence Exemption Affidavit (Form 2368), using their name (e.g., “Chris Smith, as Grantor of the Chris Smith Revocable Trust”).
  3. What if the grantor or beneficiary of the trust is unable to complete and sign the Principal Residence Exemption Affidavit (Form 2368)?
    The trustee may sign on their behalf, using the grantor’s or beneficiary’s name (e.g., “Chris Smith, Trustee of the Bob Jones Trust, on behalf of Bob Jones, Grantor of the Bob Jones Revocable Trust”).
  4. Chris owns two parcels: Blue Acre and Red Acre (a cottage). Chris resides at Red Acre on weekends and during summer months. The remainder of the time he resides at Blue Acre. The taxable value for Red Acre is more than his home on Blue Acre. Can Chris claim the Principal Residence Exemption on Red Acre for greater tax savings?
    No. The principal residence exemption can only be claimed on the property that is the owner’s true, fixed, and permanent home which is Blue Acre in this case. It cannot be claimed based on potential tax savings.
  5. Chris owns two parcels, Blue Acre (his principal residence) and Red Acre (his contiguous principal residence). Must he file a separate Principal Residence Exemption Affidavit (Form 2368) for each parcel?
    Yes. A separate Principal Residence Exemption Affidavit (Form 2368) is required for each parcel.
  6. When a parcel is split or combined, must the owner file a new Principal Residence Exemption Affidavit (Form 2368)?
    Yes. Combinations and splits result in new parcel numbers requiring filing a new Principal Residence Exemption Affidavit (Form 2368) with the Assessor.
  7. If I missed the June 1 or November 1 filing deadline, may I still claim the principal residence exemption?
    Yes. The owner can file a Principal Residence Exemption Affidavit (Form 2368) with the local assessor. The assessor may retroactively grant the exemption for the current and previous three calendar years, assuming the owner met the requirements for the PRE by the June 1 or November 1 deadline for each year being claimed by the owner. This can be done at any time during the year.
  8. A person that qualified for a principal residence exemption, but did not claim the principal residence exemption, dies. Can the estate file on the deceased owner’s behalf?
    Yes. The estate may file a Principal Residence Exemption Affidavit (Form 2368) with the local assessor to claim the exemption for the current and previous three calendar years if the deceased owner occupied the property as a principal residence on June 1 or November 1 and the exemption was not on the tax roll for these years.
  9. Can the July or December Board of Review grant untimely Principal Residence Exemption claims?
    No. Since July 11, 2022, the July and December Board of Review have had no authority to grant the exemption. Only the Assessor has the authority to grant untimely claims.
  10. How long does a valid Principal Residence Exemption claim remain in effect?
    It stays on the property as long as the owner continues to meet the eligibility requirements for the principal residence exemption.
  11. What must an owner do when the property is no longer their principal residence?
    Within 90 days after the property is no longer used as a principal residence by the owner claiming an exemption, the owner must submit a Request to Rescind Principal Residence Exemption (Form 2602) with the local assessor.
  12. When is the Principal Residence Exemption removed after filing a timely Request to Rescind Principal Residence Exemption (Form 2602)?
    It must be removed from the tax roll on December 31 of the year the rescind request was filed.
  13. If a property owner who claimed the Principal Residence Exemption dies, must the principal residence exemption be rescinded?
    Yes. The deceased is no longer eligible because they cannot occupy the property or intend to return. The estate’s personal representative or trustee must file a Request to Rescind Principal Residence Exemption (Form 2602) with the Assessor within 90 days of death.
  14. After a divorce, who must rescind the principal residence exemption claim?
    The spouse who no longer owns and occupies the property must file a Request to Rescind Principal Residence Exemption (Form 2602) with the Assessor.
  15. If the lender foreclosed on a mortgage, must the claim for the principal residence exemption be rescinded?
    The owner/mortgagor must file a Request to Rescind Principal Residence Exemption (Form 2602) with the local assessor within 90 days of vacating the property during the redemption period or within 90 days after the redemption period expires.