A Michigan real estate agent is counseling a buyer who is purchasing a home. The buyer asks whether the Principal Residence Exemption (PRE) will automatically apply to their new home after closing. What should the agent tell the buyer?
Correct Answer
C) No, the buyer must affirmatively file a PRE affidavit with the local assessor by June 1 or November 1 to receive the exemption.
Michigan's Principal Residence Exemption (PRE) is not automatic. Under MCL 211.7cc, a homeowner must file a Principal Residence Exemption affidavit with the local assessor by June 1 to receive the exemption for the summer tax levy or by November 1 to receive it for the winter tax levy. The PRE exempts the principal residence from up to 18 mills of school operating taxes, which can result in significant tax savings. Agents should advise buyers to file promptly after closing to avoid missing a tax levy deadline.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Community property is a form of ownership recognized in certain states where property acquired during marriage is considered equally owned by both spouses, regardless of who earned the money or whose name is on the title.
Condominium ownership involves owning a unit of airspace within a multi-unit building plus an undivided interest in the common elements shared with other unit owners. Each unit is separately taxed and financed.
In a cooperative (co-op), the building is owned by a corporation, and residents purchase shares of stock in the corporation that entitle them to a proprietary lease on a specific unit. Residents are shareholders, not property owners.
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