Michigan offers three main property tax breaks for disabled homeowners: a full exemption for qualifying disabled veterans, a poverty-based exemption for low-income owners, and an enhanced homestead property tax credit claimed on your state income tax return. Which one fits depends on whether your disability is service-connected, what your household earns, and whether you own and live in the home. A Michigan property tax exemption for the disabled can wipe out your bill entirely in the right circumstances, but each program has its own form, its own deadline, and its own annual renewal requirement.
Disabled Veterans Exemption
If you’re a Michigan resident veteran with a qualifying service-connected disability, the state eliminates your property tax bill entirely on your primary home. This is a full exemption, not a credit or a partial reduction.1Michigan Legislature. MCL Section 211.7b
You must have left the military under honorable conditions. A general discharge under honorable conditions also counts; other-than-honorable and dishonorable discharges do not.2Michigan State Tax Commission. Disabled Veterans Exemption Frequently Asked Questions Beyond that, you need to fit one of three VA categories:
- A 100% permanent and total service-connected disability rating with benefits paid at the 100% rate.
- A VA certificate showing you received or are receiving financial assistance for specially adapted housing due to a service-connected disability.
- A VA rating of individually unemployable because of service-connected conditions, even if your combined rating is below 100%.
The exemption applies only to real property you own and use as your primary home. If you buy or sell the home partway through the year, it’s prorated by the days you owned and occupied it.1Michigan Legislature. MCL Section 211.7b
Surviving Spouses
If a veteran who qualified dies, the unremarried surviving spouse keeps the exemption. The spouse doesn’t have to stay in the same house. The exemption follows them to any homestead they own, including a home bought after the veteran’s death. Remarriage ends it permanently.1Michigan Legislature. MCL Section 211.7b
Poverty Exemption for Low-Income Homeowners
If your disability isn’t service-connected, or you’re not a veteran at all, the poverty exemption under MCL 211.7u is the next place to look. The program isn’t disability-specific, but disability is often what puts a household within its income limits. Your local Board of Review decides whether you qualify.3Michigan Legislature. MCL Section 211.7u
You must own and live in the home as your primary residence, and your household income and assets must fall within the thresholds your city or township has adopted. State law sets a floor at the federal poverty guidelines, but many communities set more generous limits, so it’s worth asking your assessor even if you think you earn too much.
Full or Partial Relief
The Board of Review can grant a full exemption, cutting your taxable value by 100%, or a partial exemption at 75%, 50%, or 25%. Some jurisdictions use other percentages approved by the State Tax Commission. Where you land depends on how your income and assets measure up against your community’s guidelines.3Michigan Legislature. MCL Section 211.7u
Homestead Property Tax Credit
This is the program most disabled Michigan homeowners overlook. It isn’t an exemption from your tax bill. It’s a credit on your Michigan income tax return, and if the credit is larger than what you owe, the state refunds the difference. You don’t need to be a veteran, and there’s no poverty finding, but household resources must be $71,500 or less.4Michigan Department of Treasury. Michigan Taxpayers Encouraged to Check Eligibility for Homestead Property Tax Credit
Disabled claimants get a much more generous calculation. If you are totally and permanently disabled as defined by Social Security, paraplegic, hemiplegic, quadriplegic, deaf, or blind, your credit equals the full amount by which your property taxes exceed a small percentage of your household resources. For resources over $6,000, that percentage is 3.2%. For resources of $3,000 or less, it drops to zero, so the credit covers your entire tax bill.5Michigan Legislature. MCL Section 206.522
You claim the credit on Form MI-1040CR filed with your Michigan income tax return. If you also qualify for the veterans or poverty exemption, you can combine programs to see what works best, but the credit form only lets you claim one classification.5Michigan Legislature. MCL Section 206.522
Summer Tax Deferment
Michigan lets disabled homeowners, veterans, surviving spouses of veterans, and seniors delay paying the summer property tax bill until the winter bill is due. This doesn’t cut what you owe. It just moves the due date. File the deferment application with your local treasurer by September 15 of the tax year. It’s a cash-flow tool, not a savings program.
How to File
Disabled Veterans Exemption
File Form 5107, the State Tax Commission Affidavit for Disabled Veterans Exemption, with your local assessor. The form asks for your property’s parcel identification number (on your most recent tax bill), your discharge status, and the disability category you’re claiming under.6Michigan Department of Treasury. State Tax Commission Affidavit for Disabled Veterans Exemption
Attach the matching VA letter: the 100% permanent and total determination, the specially adapted housing certificate, or the individual unemployability letter. Without the corresponding VA documentation, the application won’t be processed.6Michigan Department of Treasury. State Tax Commission Affidavit for Disabled Veterans Exemption
Poverty Exemption
Use Form 5737, the Application for MCL 211.7u Poverty Exemption. It asks about every person in the household and requires federal and state tax returns for all adult residents.7Michigan Department of Treasury. Application and Affirmation for MCL 211.7u Poverty Exemption Any adult who wasn’t required to file a return can submit Form 4988, the Poverty Exemption Affidavit, instead.3Michigan Legislature. MCL Section 211.7u
The Board of Review may also ask for bank statements, documentation of other assets like a second property or vehicle, and proof that you own and occupy the home. Make sure your reported income matches your tax returns. Inconsistencies are the most common reason applications get denied.
Filing Deadlines
The two exemptions run on different clocks, and confusing them costs a full year of benefits.
For the disabled veterans exemption, Form 5107 can be filed with your local assessor any time from January 1 through the day before the last day of the December Board of Review. That gives you nearly the whole calendar year.8Michigan Department of Treasury. Bulletin 4 of 2023 – Disabled Veterans Exemption You must refile every year; it does not renew automatically.
For the poverty exemption, the main window is the March Board of Review. File after January 1 and before the last day of the March session, which usually runs through the second or third week of the month. If you missed March and your exemption was neither on the assessment roll nor previously denied, you may be able to file a claim for the prior tax year at the July or December Board of Review.3Michigan Legislature. MCL Section 211.7u It’s a narrow exception, not a general second chance. The poverty exemption also has to be renewed every year.
If Your Application Is Denied
A denial can be appealed to the Michigan Tax Tribunal, but the window is short. For decisions from the March Board of Review, you generally have until June 30 of that tax year to file a petition. For decisions from the July or December Board of Review, you have 35 days from the board’s decision.9Michigan Legislature. MCL Section 205.735
The petition must be in writing and served on the local assessor by certified mail, with copies to the local school district secretary and the county clerk. The Tribunal decides independently of your Board of Review. If the denial came down to missing paperwork rather than ineligibility, refiling with complete documentation at the next Board of Review session is often faster than appealing.