Tom and Lisa are buying a home in Ann Arbor, Michigan. Their agent explains that after closing, they should file for the Principal Residence Exemption (PRE) to reduce their property tax burden. Which of the following most accurately describes the PRE benefit available to qualifying Michigan homeowners?
Correct Answer
B) The PRE exempts the primary residence from up to 18 mills of school operating taxes
Michigan's Principal Residence Exemption (PRE), established under MCL 211.7cc, exempts a homeowner's primary residence from up to 18 mills of school operating taxes. This is a significant tax benefit unique to Michigan that reduces the millage rate applied to the property's taxable value. Homeowners must file an affidavit with the local assessor to claim the exemption.
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