How to Claim the Principal Residence Exemption in Michigan: Step-by-Step
The Principal Residence Exemption is the single biggest tax break available to Michigan homeowners, and it takes about 10 minutes to claim. Filing Form 2368 with your local assessor exempts your primary home from the 18-mill school operating tax — a savings of roughly $1,800 per $100,000 of taxable value every year. On the median Michigan home, that’s over $2,000 annually. Yet thousands of Michigan homeowners fail to file, either because they don’t know it exists or because they assume it happens automatically. It doesn’t.
This guide walks through exactly how to claim the PRE, who qualifies, what the deadline is, and what happens if you forget. If you own and live in a Michigan home and haven’t filed Form 2368, you’re paying taxes you don’t owe.
What the PRE Saves You
The PRE exempts you from the 18-mill school operating tax. Here’s what that means in actual dollars at different taxable values:
| Taxable Value (TV) | Approximate Market Value | Annual PRE Savings | Monthly PRE Savings |
|---|---|---|---|
| $75,000 | $150,000 | $1,350 | $113 |
| $100,000 | $200,000 | $1,800 | $150 |
| $125,000 | $250,000 | $2,250 | $188 |
| $150,000 | $300,000 | $2,700 | $225 |
| $200,000 | $400,000 | $3,600 | $300 |
| $250,000 | $500,000 | $4,500 | $375 |
For a homeowner with a taxable value of $150,000, the PRE saves $2,700 per year — $225 per month. Over 10 years, that’s $27,000. Over a 30-year mortgage, it’s $81,000. Use our amortization schedule calculator for detailed numbers. This isn’t a minor tax credit — it’s a substantial, ongoing savings that directly reduces your property tax bill.
Use our property tax calculator to see exactly how the PRE affects your specific tax burden based on your home’s value and local millage rate.
Who Qualifies for the PRE
To claim the PRE, you must meet all of the following criteria:
- Own the property. You must be on the deed. Renters cannot claim the PRE (though they may qualify for the Homestead Property Tax Credit on their state income tax).
- Occupy the home as your principal residence. This is where you live, sleep, eat meals, and receive mail. Weekend homes, vacation properties, and investment rentals do not qualify.
- Claim only one PRE. You can only have a PRE on one property at a time. Married couples living together share one PRE.
- The property must be classified as residential. Commercial, industrial, and agricultural properties have different assessment rules.
Special Situations
- Land contract buyers: If you’re buying on land contract and occupy the home, you can claim the PRE even though the seller remains on the title.
- Trust-owned property: If the home is held in a revocable living trust and you occupy it, you can typically claim the PRE. Irrevocable trusts may not qualify — consult your attorney.
- Partial rental: If you rent out a portion of your home (a room, an in-law suite), you may still claim the PRE on the owner-occupied portion. The exemption may be prorated.
- Temporary absence: If you’re temporarily away (military deployment, medical treatment, work assignment), you can maintain the PRE as long as the property remains your principal residence and you intend to return.
How to File: Step-by-Step
Step 1: Get Form 2368
Download Form 2368 (Homeowner’s Principal Residence Exemption Affidavit) from the Michigan Department of Treasury website or pick up a copy at your local assessor’s office. Most municipalities also have it available on their website.
Step 2: Complete the Form
The form is straightforward — one page. You’ll provide:
- Your name and Social Security Number (required for verification)
- Property address
- Property identification number (found on your assessment notice or tax bill)
- Date you occupied the property as your principal residence
- Whether you are rescinding a PRE on any other property
- Your signature affirming the information is accurate
Step 3: Submit to Your Local Assessor
File the completed form with the assessor’s office for the city, township, or village where the property is located. You can typically:
- Submit in person at the assessor’s office
- Mail it to the assessor’s office address
- Some municipalities accept email or online filing — check your local assessor’s website
Step 4: Verify It’s Applied
After filing, verify the PRE is reflected on your next tax bill. The summer tax bill (mailed in July) should show the exemption. If it’s not reflected, contact the assessor’s office immediately. Keep a copy of your filed Form 2368 for your records.
Critical Deadlines
| Situation | Filing Deadline | Effective Date |
|---|---|---|
| New purchase (closing before June 1) | June 1 of that year | That year’s summer and winter bills |
| New purchase (closing after June 1) | June 1 of the following year | Following year’s bills |
| Missed the deadline | File immediately for next year | Cannot claim retroactively |
| Rescinding PRE on old home | Within 90 days of no longer occupying | Prorated based on move-out date |
The June 1 deadline is firm. If you close on a home May 15 and file by June 1, you’ll get the PRE for that calendar year. If you close June 15 and file immediately, you won’t receive the benefit until the following year. Plan your closing date and PRE filing accordingly — closing before June 1 saves you one full year of the 18-mill tax.
When You Sell or Move
When you leave your principal residence, you must rescind (cancel) your PRE by filing Form 2602 (Request to Rescind Homeowner’s Principal Residence Exemption) or by checking the rescission box on Form 2368 when filing for a new property.
- Selling and buying a new home: File a new Form 2368 for your new home and rescind the PRE on your old home. You can maintain the PRE on both properties for up to 18 months during the transition, provided you’re actively selling the old home.
- Converting to a rental: If you move out but keep the home as a rental, you must rescind the PRE within 90 days. The property will then be assessed the full 18-mill school operating tax. Failure to rescind when you’re no longer occupying the home is a violation that can result in penalties, back taxes, and interest.
- Moving temporarily: If you’re temporarily away but intend to return, you can maintain the PRE. Military deployments, temporary job relocations, and medical absences generally qualify for continued PRE status.
What If You Forgot to File?
If you’ve been living in your Michigan home without a PRE, you’ve been overpaying taxes by approximately $1,800 per $100,000 of taxable value annually. Unfortunately, Michigan does not allow retroactive PRE claims — you can only get the exemption going forward from the date you file.
File immediately. Every day you wait is money lost. If you file before June 1, the PRE takes effect for that calendar year. If you file after June 1, it takes effect the following year. There is no grace period and no exception for not knowing about the requirement.
For new homeowners, your real estate agent, title company, or mortgage lender should mention the PRE at closing. Many include Form 2368 in the closing document package. But ultimately, it’s your responsibility to file. The state doesn’t automatically grant it.
PRE vs. Other Michigan Property Tax Breaks
| Program | Benefit | Automatic? | How to Claim |
|---|---|---|---|
| Principal Residence Exemption (PRE) | Exempt from 18-mill school operating tax | No — must file Form 2368 | File with local assessor by June 1 |
| Homestead Property Tax Credit | Refund if taxes exceed 3.2% of income | No — must file with state return | File Form MI-1040CR with MI income tax |
| Disabled Veterans Exemption | Full property tax exemption | No — must apply | Apply through local assessor with VA documentation |
| Poverty Exemption | Partial or full exemption | No — must apply annually | Apply through Board of Review with income documentation |
The PRE and the Homestead Property Tax Credit are the two most widely applicable programs. Make sure you’re claiming both — the PRE reduces your tax bill, while the Homestead Credit can refund you money on your state income tax return if your remaining taxes still exceed 3.2% of your household income. Our mortgage calculator and affordability calculator help you understand total housing costs with these exemptions applied.
Compare With Other States
Considering other markets? Here’s how other states compare:
- How to Appeal Your Property Tax in Wisconsin: Step-by-Step Guide
- How to Appeal Your Property Tax in Iowa: Step-by-Step Guide
- How to Appeal Your Property Tax in Louisiana: Step-by-Step Guide
Frequently Asked Questions
Common PRE Mistakes That Cost Michigan Homeowners Money
Property tax professionals and assessors report seeing the same PRE errors repeatedly. Avoid these costly mistakes:
Not Filing at All
The most expensive mistake is simply not filing. An estimated 5–8% of Michigan owner-occupants don’t have a PRE on file, costing them $1,500–$4,000+ per year in unnecessary school operating taxes. This is especially common among first-time buyers who don’t know the requirement exists and aren’t told about it by their agent or lender. If you’ve owned your Michigan home for years without filing, file today — you can’t recover past overpayments, but you can stop the bleeding immediately.
Missing the June 1 Deadline
Filing on June 2 means waiting until January 1 of the following year for your exemption to take effect. On a home with $150,000 taxable value, that delay costs $2,700 for the missed year. Set a calendar reminder, and file as soon as you close on your home — don’t wait until the deadline approaches.
Forgetting to Rescind After Moving
If you move to a new primary residence but keep the old home (as a rental or vacant), you must rescind the PRE within 90 days by filing a rescission with the assessor. Use our rent affordability calculator for detailed numbers. Keeping the PRE on a non-primary-residence property is considered fraud. Michigan conducts audits comparing PRE addresses with voter registration, driver’s license addresses, and utility usage patterns. Getting caught means paying back taxes with interest and potential penalties — far more expensive than simply paying the correct tax amount.
Not Filing on Your New Home
When you move, your PRE does not automatically transfer. You must file a new Form 2368 with the assessor in your new jurisdiction. Many homeowners assume the PRE follows them, and they end up paying the school operating tax on their new home while their old home still carries the exemption they forgot to rescind.
PRE on LLC-Owned Properties
If your primary residence is owned by an LLC (common among investors who also live in one of their properties), the PRE may not apply. Michigan law requires the property to be owned by a natural person to qualify for the PRE. Some trust and LLC structures can disqualify the property. Consult a Michigan real estate attorney if your home is in an entity rather than your personal name.
PRE and Property Tax Appeals
The PRE and property tax appeals are separate processes, but they interact. If you successfully appeal your property’s taxable value downward while you have a PRE in place, the tax savings are amplified because the lower taxable value is multiplied by a lower effective millage rate. For example, reducing your taxable value from $150,000 to $130,000 with a PRE saves approximately $1,060/year. Without the PRE, the same reduction saves only about $800/year. Always make sure your PRE is filed before pursuing a tax appeal — the savings compound.
See our guide on how to appeal your Michigan property tax for the full appeal process. And use our property tax calculator to model the combined impact of a PRE filing and a successful tax appeal on your annual property tax bill.
Compare With Other States
Considering other markets? Here’s how other states compare:
- How to Appeal Your Property Tax in Wisconsin: Step-by-Step Guide
- How to Appeal Your Property Tax in Iowa: Step-by-Step Guide
- How to Appeal Your Property Tax in Louisiana: Step-by-Step Guide
Frequently Asked Questions
What is the PRE in Michigan?
The Principal Residence Exemption (PRE) is a property tax exemption that removes the 18-mill school operating tax from your primary home’s tax bill. It saves approximately $1,800 per $100,000 of taxable value annually. You must file Form 2368 with your local assessor to receive it — it is not automatic.
How do I file for the PRE?
Complete Form 2368 (Homeowner’s Principal Residence Exemption Affidavit) and submit it to your local assessor’s office. The form requires your name, SSN, property address, and the date you began occupying the home. File by June 1 to receive the exemption for that calendar year.
Can I have a PRE on two properties?
Not permanently. You can have a PRE on only one property at a time — your principal residence. The exception is a temporary overlap of up to 18 months when you’re selling your old home and buying a new one. Use our home selling guide for detailed numbers. During this transition, both properties can carry the PRE if you’re actively trying to sell the old home.
What happens if I don’t file for the PRE?
You’ll pay the full 18-mill school operating tax on top of all other millages. On a home with a taxable value of $125,000, that’s an unnecessary $2,250 per year. Michigan does not apply the PRE retroactively — you can only benefit from the date you file forward. File as soon as possible to stop overpaying.
Can I claim the PRE on a vacation home?
No. The PRE is only available for your principal residence — the home where you live primarily, vote, and register your vehicles. Vacation homes, second homes, and investment properties do not qualify. Using the PRE on a non-qualifying property is considered fraud and can result in back taxes, penalties, and interest. Use our closing cost calculator to understand total costs for non-PRE properties.