Michigan Homestead Exemption: Amount, Filing & Savings
Michigan’s homestead tax break is the principal residence exemption, or PRE (MCL 211.7cc). It exempts an owner-occupied home from the local school operating tax, “up to 18 mills.” You claim it on Form 2368 with the city or township assessor by June 1 for that year’s summer and winter levies, or by November 1 for the winter levy. An owner who qualified by those dates but never filed can still claim the current year and the 3 years before it (§ 7cc(19)).
Two other laws use the word homestead. The homestead property tax credit is an income-tax credit claimed on Form MI-1040CR. The creditor exemptions in the Revised Judicature Act protect some home equity from collection. Each is covered below with its own statute.
The PRE: school operating millage, not your whole bill
Section 7cc(1) exempts a principal residence “from the tax levied by a local school district for school operating purposes to the extent provided under section 1211 of the revised school code.” Section 1211 caps that levy at “not more than 18 mills” or the 1993 rate, whichever is less. It also lets some districts reduce the number of mills a principal residence is exempt from. The PRE covers only school operating mills under § 1211; it is not a cut to the whole tax bill.
Timing follows § 7cc(2). An owner files “on or before June 1 for the immediately succeeding summer tax levy and all subsequent tax levies or on or before November 1 for the immediately succeeding winter tax levy and all subsequent tax levies.” Treasury’s instructions for Form 2368 (Rev. 07-22) spell it out. A June 1 affidavit gets the PRE “on the current year summer and winter tax levy.” One filed after June 1 and by November 1 gets “the current winter tax levy and subsequent tax levies.” Missing both dates does not end the claim for an owner who already qualified. Under § 7cc(19), an owner who “owned and occupied a principal residence” within those filing periods but whose exemption “was not on the tax roll” may file the affidavit “for the current calendar year or the immediately preceding 3 calendar years.” Treasury says the assessor may grant it retroactively “assuming the owner met the requirements for the PRE by the June 1 or November 1 deadline for each year being claimed.” Your status as a principal residence is judged “on the date an affidavit claiming an exemption is filed,” not on tax day.
The form goes to the local assessor: “DO NOT send this form directly to the Department of Treasury.” It asks what percentage of the property you occupy. Treasury’s instructions allow 100% for a single-family home where less than half is rented to others. A duplex, a second house on the parcel, or a converted apartment with its own entrance means a partial exemption. Section 7cc(3) lists the situations that disqualify an owner. Read that list in the statute before signing, because the affidavit is made under penalty of perjury.
When you move, sell or get audited
- Rescind within 90 days. Once the home is no longer your principal residence, § 7cc(5) requires Form 2602 (or a conditional rescission on Form 4640) with the local unit. The statute lets three groups of absent owners keep the exemption instead, if they meet every condition of the subsection that covers them: an owner now living in a nursing home, an assisted living facility or, solely for convalescence, another location (§ 7cc(5)(a)–(d)); an owner absent on active duty in the Armed Forces, a reserve component or the National Guard (§ 7cc(32)); and an owner who left because the home was damaged or destroyed, for that tax year and the next 2 (§ 7cc(33)). Missing it costs “$5.00 per day for each separate failure beginning after the 90 days have elapsed, up to a maximum of $200.00.”
- Out-of-state claims. Someone who holds the PRE and “a substantially similar exemption, deduction, or credit in another state” owes “a penalty of $500.00.”
- Lookback. Treasury “may review the validity of exemptions for the current calendar year and for the 3 immediately preceding calendar years.” A denial brings a corrected bill for the added tax “with interest at the rate of 1.25% per month or fraction of a month” plus penalties.
- At closing. Whoever prepares the closing statement “shall provide affidavit and rescission forms to the buyer and seller.” If that did not happen and no exemption was recorded, the buyer may appeal to Treasury “within 30 days of notice to the buyer that an exemption was not recorded.”
Section 7cc was last amended by 2022 PA 141. Treasury announced that PRE audits and denials “Begin April 24, 2026.”
Homestead property tax credit: MI-1040CR for 2025
This credit, under MCL 206.520, comes through the state income tax, and renters can claim it too. For the 2025 tax year, Treasury’s MI-1040CR instructions list three conditions: “Your homestead is located in Michigan,” you “were a Michigan resident at least six months of 2025,” and you own the homestead with 2025 property taxes levied, or you paid rent under a rental contract.
| 2025 claim limit | Figure |
|---|---|
| Total household resources, above which no credit | $71,500 |
| Credit reduced 10% for every $1,000 (or part of $1,000) of total household resources over | $62,500 |
| Taxable value, above which no credit (vacant farmland classified agricultural excluded) | $165,400 |
| Maximum credit “for most claimants” | $1,900 |
The statute set the maximum at $1,500 from 2018. From 2021 it rises each year with the U.S. consumer price index, rounded to the nearest $100 (§ 206.520(15)). File with your MI-1040 by April 15, 2026 for a timely claim. The instructions add: “The filing deadline to receive a 2025 property tax credit is April 15, 2030.” Blind owners, people in the active military, eligible veterans and eligible veterans’ surviving spouses can also complete MI-1040CR-2 and use whichever form gives the larger credit.
For rates and bill estimates, use the property tax calculator or compare state taxes.
Creditors: $3,500 outside bankruptcy, $51,150 inside it
Outside bankruptcy, MCL 600.6023(1)(g) exempts from levy and sale under an execution a homestead “not exceeding in value $3,500.00.” The area limit is 40 acres outside a recorded plat, city or village, or “not more than 1 lot” inside one, “owned and occupied by any resident of this state.” The same subdivision says the exemption “does not apply to a mortgage on the homestead that is lawfully obtained.” For this exemption, a mortgage “is not valid for purposes of this subdivision without the signature of a married judgment debtor’s spouse” unless it secures payment of the purchase money or part of it, or it has been recorded with the county register of deeds for 25 years and no notice of a claim of invalidity was filed in that office during those 25 years. Section 600.6023(2) adds that the exemptions “do not extend to any lien on the exempt property that is excluded from exemption by law.”
In bankruptcy, a Michigan debtor who uses the state list rather than the federal one claims under MCL 600.5451(1)(m). The statutory amounts, $30,000 or $45,000 “if the debtor or a dependent of the debtor at the time of the filing of the bankruptcy petition is 65 years of age or older or disabled,” are indexed every three years. The State Treasurer’s notice of January 30, 2026 sets the “2026 Value” at $51,150 and $76,725. These apply to “cases filed on or after April 1 following the adjustment date.” Under § 5451(2), the exemption does not reach “a mortgage, lien, or security interest in the exempt property that is consensually given or lawfully obtained.” The exception is a lien “obtained by judgment, attachment, levy, or similar legal process in connection with a court action or proceeding against the debtor.”
A separate item, § 5451(1)(n), covers property held by a husband and wife as tenants by the entirety, “except that this exemption does not apply with regard to a claim based on a joint debt of the husband and wife.”
Michigan homeowners ask
We closed in August. Is it too late for a PRE this year?
Not for the winter levy. An affidavit filed after June 1 and on or before November 1 covers the current winter tax levy and the ones after it. The summer levy that already went out is not covered.
Do I have to refile every year?
No. The affidavit covers the next levy “and all subsequent tax levies” until you rescind it or it is denied.
Can I keep the PRE on my old house while it is for sale?
Only through a conditional rescission (Form 4640), and only if the old house “is not occupied, is for sale, is not leased, and is not used for any business or commercial purpose.” You must also claim the PRE on your new home. Form 4640 goes to the city or township assessor “on or before June 1 or November 1 of the first year the exemption is claimed.” The old house keeps the exemption “for not more than 3 tax years,” and you must “annually verify to the assessor” on or before December 31 that it still meets every condition. If the house is leased, the local unit denies the conditional rescission retroactively to December 31 of the year before the lease.
Does filing the PRE get me the income-tax credit too?
No. Treasury calls the PRE “distinct from the Michigan Homestead Property Tax Credit, which applies to income tax returns.” The credit needs its own MI-1040CR.
Related: state guides, closing costs by state, homestead exemptions by state, mortgage payment calculator.