Michigan Principal Residence Exemption: Form 2368 and Rescission

To claim Michigan’s Principal Residence Exemption, you file a signed affidavit (Form 2368) with the assessor for the city or township where your home is located. File on or before June 1 to remove the school operating millage from that year’s summer tax bill, or on or before November 1 to have the exemption apply to the winter bill.¹ The exemption strips up to 18 mills of school operating tax off a qualifying home, so the paperwork is worth doing carefully.

Who Qualifies to File

Two things have to be true on the day you sign: you own the property, and you occupy it as your true, fixed, and permanent home. The affidavit also asks you to confirm that you have not claimed a similar exemption or credit on property in another state.² Only one PRE is allowed at a time. If you or your spouse holds an active exemption on another Michigan property, you have to rescind that one before this claim takes effect.

Michigan’s definition of “owner” is broader than a deed holder, and the details matter:

Land contract purchasers qualify as owners, provided the contract is written, identifies both parties, describes the property, states the sale terms, and is signed by the seller.³
A person holding a life lease in property they previously sold or transferred is treated as a partial owner eligible for the exemption.³
A trust itself is not an owner, but a beneficiary can claim the PRE if the trust or will gives that beneficiary ownership rights in the property. A sole beneficiary who is totally and permanently disabled can also qualify when the trust purchased the property as that person’s principal residence.³
Cooperative housing corporations qualify, with the exemption percentage based on the share of units occupied by tenant stockholders.³
LLCs and corporations do not qualify. Even a sole member of an LLC that holds title to the home they live in cannot claim the PRE on that property.³

That last rule catches people. Homeowners who transfer property into an LLC for liability protection sometimes forfeit the PRE without realizing it. Talk to a tax professional before making that kind of transfer.

Occupancy is the other half of the test. “Principal residence” means the place you intend to return to whenever you are away. Vacation homes, rentals, and homes kept but not lived in do not qualify.

Filling Out Form 2368

Form 2368, the Principal Residence Exemption Affidavit, is available from your local assessor or the Michigan Department of Treasury website.⁴ The form asks for:

The property tax identification number, which appears on your tax bill or assessment notice. If you cannot find it, call your township or city assessor.⁵
The name of the township or city where the property sits, and the county.
The last four digits of the Social Security number for each owner listed on the title. Treasury uses these to check for duplicate claims across the state.⁵
The date you began both owning and occupying the property as your principal residence.⁵

Names on the affidavit should match the names on your recorded legal documents. Mismatched names, blank fields, and incorrect parcel numbers are the usual reasons assessors reject or delay an application. Check everything before you submit.

Where and When to File

The completed form goes to the city or township assessor where the property is located, not to the state.⁵ You can mail it or drop it off. If you mail it, use certified mail or ask for a receipt so you have proof of the date.

Two annual cutoffs control when the exemption starts:

A valid affidavit filed on or before June 1 applies to that year’s summer tax levy and every levy after that.¹
A valid affidavit filed after June 1 but on or before November 1 applies to that year’s winter tax levy and every levy after that.¹

Missing June 1 does not sink the whole year. The summer bill will go out at the higher rate, and the exemption picks up on the winter bill. Missing November 1 pushes the effective date into the next tax year. Put both dates on the calendar the day you close.

Partial Exemptions for Mixed-Use Homes

If part of your home is used for something other than your residence, the exemption applies only to the portion that is your principal residence.² Two situations come up most often. Renting out less than 50% of the living space can still support a full PRE, but sharing a two-bedroom home equally with a tenant is generally presumed to be 50/50, which produces a 50% exemption.⁶ For a home-based business, you claim only the share of taxable value attributable to the residential portion. Report the split honestly; Treasury audits these claims, and overstating the residential percentage means back taxes and interest.

Rescinding the Exemption When Things Change

When the home stops being your principal residence, whether you sell, move out, convert it to a rental, or abandon it, you have 90 days to file Form 2602, the Request to Rescind Principal Residence Exemption, with your local assessor.² The form asks for the property tax identification number, the last four digits of your Social Security number, the reason for rescinding, and the date the property stopped being your principal residence.⁷

Missing the 90-day window is expensive. The daily penalty runs $5 per day past the deadline, capped at $200. Treasury has discretion to waive it but is not obligated to. On top of that, the assessor issues a corrected tax bill covering the period the exemption should not have applied, and that bill carries interest at 1.25% per month from the original due date. Interest begins accruing again 60 days after the corrected bill is issued at the same rate.²

Conditional Rescission if the Old Home Has Not Sold

Moving into a new principal residence before selling the old one does not have to mean immediate loss of the exemption on the former home. Michigan permits a conditional rescission that keeps the PRE in place on the old property for up to three tax years, as long as the property is not occupied, is listed for sale, is not leased, and is not used for any business or commercial purpose.²

You claim it by filing a conditional rescission form (not the standard rescission) with the local assessor within the same June 1 and November 1 deadlines that apply to affidavit filings. Banks and credit unions that acquire property through foreclosure can also use this provision under similar conditions. If any of the requirements stops being met during the three years, say the property is rented or taken off the market, the conditional rescission ends and the full non-exempt rate applies going forward.

Active-Duty Military Affidavit

Active-duty military homeowners get more flexibility. If you are deployed or stationed away from your Michigan home, you can keep the PRE even while renting out all or part of the home, provided it would otherwise qualify as your principal residence. The exemption stays in place for up to three years after the property is rented or leased.⁸

To use this provision, file Form 4660, the Principal Residence Exemption Active Duty Military Affidavit, with the assessor for the city or township where the property is located. It must be submitted on or before May 1 of the first year you are claiming the military exception.⁸ The May 1 date is not the same as the June 1 or November 1 deadlines for the standard Form 2368. Miss it and you lose a year of protection.

If Your Exemption Is Denied

The local Board of Review has no authority over the Principal Residence Exemption, and the Board of Review petition form (Form 618, L-4035) says so directly.⁹ Do not send an appeal there.

If a local assessor or county official denies your exemption, you appeal to the Michigan Tax Tribunal within 35 days of the denial. If the denial comes from the Michigan Department of Treasury, you appeal directly to Treasury within 35 days of the denial notice.¹⁰ Those 35-day windows are firm. If you simply missed a filing deadline and no one has denied anything, the practical fix is to file the affidavit now and accept that the exemption will pick up on the next available levy.

1
Michigan Department of Treasury. Principal Residence Exemption (PRE) Affidavit – General Instructions
2
Michigan Legislature. Michigan Compiled Laws 211.7cc
3
Michigan Department of Treasury. Ownership Requirement
4
Michigan Department of Treasury. Principal Residence Exemption Forms
5
Michigan Department of Treasury. Principal Residence Exemption (PRE) Affidavit
6
Michigan Department of Treasury. Principal Residence Exemption Guidelines
7
Michigan Department of Treasury. Request to Rescind Principal Residence Exemption (PRE)
8
Michigan Department of Treasury. Active Duty Military Affidavit Information
9
Michigan Department of Treasury. Form 618, L-4035, Petition to Board of Review
10
Michigan Department of Treasury. Denial and Appeal Process