How to File for a Principal Residence Exemption in Michigan: Complete Guide

What Is a Principal Residence Exemption in Michigan?

Michigan’s Principal Residence Exemption (PRE) — commonly called the homestead exemption — is one of the most valuable tax benefits available to homeowners in the state. Filing a PRE exempts your home from the 18-mill school operating tax, saving the average Michigan homeowner $1,500-$3,500 per year depending on their taxable value.

The PRE is not automatic. You must file an affidavit (Form 2368) with your local assessor to claim it. Fail to file, and you’ll pay the full tax rate — including the 18 mills that owner-occupants are entitled to skip. Every year, thousands of Michigan homeowners pay more than they should because they never filed the paperwork.

Here’s what 18 mills means in dollars:

On a home with a taxable value of $125,000 (roughly a $250,000 market value home), the PRE saves $2,250 every year. Over a 10-year ownership period, that’s $22,500 in tax savings from a single form. Estimate your total property tax bill — with and without the PRE — using our property tax calculator.

Who Qualifies for the PRE

The PRE is available to Michigan residents who own and occupy a property as their principal (primary) residence. The key requirements:

• Ownership: You must own the property. Renters do not qualify (their landlord might, if the landlord occupies the property as a primary residence — uncommon for rental properties).
• Occupancy: You must occupy the home as your primary residence. If you own two homes and live in one during winter and the other during summer, only one qualifies for the PRE. Michigan law defines your principal residence as the place where you have your driver’s license address, voter registration, and where you habitually reside.
• One per person: You can only claim a PRE on one property at a time. Married couples can claim a PRE on two properties only if they genuinely maintain separate principal residences (this is rare and scrutinized).

Properties that qualify:

• Single-family homes
• Condominiums
• Manufactured homes (if you own both the home and the land)
• Homes on acreage (the PRE applies to the house and up to the adjacent parcel, including up to 40 acres if used as part of the homestead)
• Two-family or multi-family homes — but only the portion you occupy (e.g., if you own a duplex and live in one unit, the PRE applies to that unit only)

Properties that do NOT qualify:

• Rental properties (investment properties you don’t live in)
• Second homes or vacation properties
• Commercial properties
• Vacant land

How to File: Step-by-Step

Step 1: Obtain Form 2368

Form 2368 (Principal Residence Exemption Affidavit) is available from your local city or township assessor’s office, or downloadable from the Michigan Department of Treasury website at michigan.gov/taxes. The form is one page and takes about 5 minutes to complete.

Step 2: Complete the Form

The form requires:

• Your name and Social Security number (or the last four digits)
• The property address and parcel number (found on your assessment notice or tax bill)
• The date you began occupying the property as your principal residence
• A certification that you own and occupy the property as your principal residence
• Your signature and date

If you’re buying a new home and selling your previous one, you’ll file Form 2368 for the new property and Form 2602 (Request to Rescind Principal Residence Exemption) for the property you’re leaving. More on rescinding below.

Step 3: File with Your Local Assessor

Submit the completed form to the assessor’s office for the city or township where the property is located. You can file in person, by mail, or (in some jurisdictions) electronically. Keep a copy for your records.

Filing locations by property type:

• City residents: City Assessor’s office
• Township residents: Township Assessor’s office
• Condos: File with the assessor for the municipality where the condo is located (not with the condo association)

Step 4: Verify It’s Applied

After filing, check your next property tax bill or assessment notice to confirm the school operating mills (18 mills) have been removed. If the exemption doesn’t appear, contact the assessor’s office immediately. Errors can usually be corrected if caught promptly, but delays can cost you a full year of savings.

Filing Deadlines

The timing of your PRE filing determines when the exemption takes effect:

If you close on a home in March and file your PRE by June 1, you’ll receive the exemption on your first summer tax bill. If you close in August and file by November 1, you’ll get it on the winter bill. File late, and you wait until the next cycle — costing you several months of unnecessary tax payments.

Best practice: File the PRE within 30 days of closing. Add it to your post-closing checklist along with changing your driver’s license address and voter registration. The sooner you file, the sooner the savings apply.

How to Rescind the PRE When Selling or Moving

When you sell your principal residence, move to a different primary home, convert the property to a rental, or otherwise stop occupying it as your primary residence, you must rescind (cancel) the PRE by filing Form 2602 (Request to Rescind Principal Residence Exemption).

Deadline to rescind: Within 90 days of the change in use or occupancy. If you sell the house in April, file Form 2602 by July.

What happens if you don’t rescind: Continuing to claim a PRE on a property that isn’t your principal residence is a violation of Michigan tax law. The Treasury Department can retroactively remove the exemption, charge back taxes with interest and penalties, and in serious cases, pursue criminal fraud charges. This is enforced — the state cross-references property records, driver’s license addresses, and voter registration to identify mismatches.

Common scenarios requiring rescindment:

• Selling your home (even if you’re buying another — you file a new PRE at the new address and rescind at the old one)
• Converting your residence to a rental property
• Moving out but keeping the property (e.g., moving in with a partner and renting out your old place)
• Moving out of state while retaining the Michigan property
• Death of the owner (the estate or heirs must rescind if they don’t occupy the property)

Special Situations

New Construction

If you’re building a new home, you can file the PRE once construction is complete and you move in. The exemption doesn’t apply during construction, so you’ll pay the full tax rate on the land until occupancy begins. File the PRE as soon as you receive your certificate of occupancy and move in.

Land Contract Purchases

If you’re buying a home on a land contract (common in Michigan), you can claim the PRE as long as you occupy the property as your principal residence. The land contract vendee (buyer) files the PRE, not the vendor (seller). Include a copy of the land contract with your filing.

Trust-Owned Properties

If your home is held in a trust and you occupy it as your principal residence, you can still claim the PRE. The trust must be a qualifying trust (typically a revocable living trust where you are both the grantor and a beneficiary). File Form 2368 with the trust name and include Form 4640 (Application for Conditional Rescission of Principal Residence Exemption) if transferring the property into a trust.

Partial-Year Occupancy

If you occupy the property as your principal residence for part of the year (e.g., you bought the home in September), the PRE applies proportionally based on the filing deadline met. You won’t get a full-year exemption for partial-year occupancy in the first year, but the exemption applies in full for subsequent years as long as you continue to occupy the property.

Military and Deployed Owners

Michigan law protects the PRE for active-duty military members who are deployed or stationed away from their Michigan home. As long as the property remains your legal residence (and you haven’t rented it out or claimed a PRE elsewhere), the exemption continues during your absence. Keep documentation of your deployment orders in case the assessor questions the exemption.

Common Mistakes to Avoid

Never filing at all: This is the most expensive mistake. The PRE is not automatic — if you don’t file Form 2368, you pay the full tax rate. Check your tax bill: if it includes “school operating” millage of 18 mills on your primary residence, you need to file immediately.

Filing late: Missing the June 1 or November 1 deadline delays the exemption by 6+ months. That’s $1,000-$2,000 in unnecessary taxes for most homeowners. File within 30 days of closing.

Forgetting to rescind: Claiming a PRE on a property you no longer occupy is tax fraud. The state actively audits for this. File Form 2602 within 90 days of moving out.

Claiming two PREs: Each person can only claim one PRE at a time. If you buy a new home before selling the old one, you can temporarily have PREs on both — but you must rescind one within 90 days of occupying the new home. Some homeowners forget this step and trigger an audit.

Assuming the previous owner’s PRE transfers to you: It doesn’t. When you buy a property, the previous owner’s PRE is automatically rescinded. You must file your own Form 2368 to claim the exemption. The assessor will not do this for you.

How to Verify Your PRE Status

You can check whether your PRE is active through several methods:

• Tax bill: Your summer and winter tax bills should show the school operating tax exempted (or reduced). If you see 18 mills of school operating tax, the PRE is not applied.
• Assessment notice: Your annual assessment notice (mailed in February) indicates whether a PRE is on file.
• Online: Many Michigan counties offer online parcel search tools (check your county’s equalization department or assessor website) where you can look up your property and see its PRE status.
• Call the assessor: Your local assessor can confirm PRE status by phone with your parcel number.

PRE and Other Michigan Tax Benefits

The PRE works alongside other Michigan tax provisions:

Proposal A cap: Your taxable value can only increase by the lesser of 5% or inflation annually (as long as you don’t transfer ownership). The PRE and Proposal A cap together create significant long-term tax savings for Michigan homeowners who stay in their homes.

Homestead Property Tax Credit: Separate from the PRE, this credit (claimed on your state income tax return) provides relief for homeowners and renters whose property taxes exceed a percentage of their income. Even with a PRE in place, you may qualify for additional relief through this credit.

Property Tax Appeal: If your assessed value (SEV) seems too high, you can appeal through the March Board of Review — read our full guide on how to appeal your Michigan property taxes. A successful appeal combined with the PRE maximizes your tax savings.

Estimate the full impact of the PRE on your property taxes with our property tax calculator, and factor the savings into your home affordability assessment. For buyers still exploring Michigan markets, check our city guides for Detroit, Grand Rapids, Lansing, and Kalamazoo for neighborhood-level pricing and tax rate details.

Frequently Asked Questions

Can I backdate my PRE if I forgot to file?

No. Michigan law does not allow retroactive PRE claims. If you should have filed in 2024 but didn’t file until 2026, you cannot recover the taxes paid in 2024 and 2025 without the exemption. The exemption applies only from the date filed forward, subject to the June 1 / November 1 deadlines. This is why filing immediately after closing is so important — every month of delay costs money that can’t be recovered.

Does the PRE apply to my entire property?

For a standard single-family home, yes — the entire property receives the exemption. For multi-unit properties, only the portion you occupy qualifies. For properties with acreage, the PRE typically covers the home and the contiguous parcel up to 40 acres. Land that is classified separately (e.g., an adjacent agricultural parcel with a different parcel number) may not be covered unless it’s used as part of the homestead.

What if I work remotely and split time between two states?

Your PRE applies to your principal residence in Michigan. If you maintain a Michigan home as your legal residence (driver’s license, voter registration, majority of time spent), you can claim the PRE even if you travel frequently or spend time in another state. However, if you spend more than half the year in another state and claim residency there, you may not qualify for the Michigan PRE. Consult a tax professional if your situation involves multi-state residency.

What happens to the PRE if I die?

The PRE remains in effect through the end of the calendar year in which the owner dies. After that, the surviving spouse can continue the PRE if they remain in the home and file their own affidavit. If the property passes to heirs who don’t occupy it as their principal residence, the PRE must be rescinded (Form 2602), and the taxable value will uncap at the next transfer of ownership. Heirs who move into the property as their principal residence can file their own PRE.

How much does the PRE save on a typical Michigan home?

At the state’s median taxable value of roughly $85,000, the PRE saves $1,530/year (18 mills x $85,000 / 1,000). In Ann Arbor, where taxable values are higher, savings can exceed $3,500/year. In Detroit, where taxable values are lower but millage rates are high, savings typically run $1,000-$1,500/year. The PRE is the single largest tax break available to Michigan homeowners — don’t leave it on the table. Use our mortgage calculator to see how the PRE savings affect your effective monthly housing cost.