Victor purchases a home in Lansing, Michigan. After closing, his agent reminds him to file a Principal Residence Exemption (PRE) affidavit. Victor asks whether he can also claim the PRE on a vacation cabin he owns on Higgins Lake, since he spends several months there each year. Which of the following is the most accurate response under Michigan law?
Correct Answer
A) Victor may claim the PRE only on the one property that is his true principal residence; he cannot claim it on both the Lansing home and the Higgins Lake cabin simultaneously.
Under MCL 211.7cc, the Principal Residence Exemption (PRE) may only be claimed on one property — the owner's single true principal residence. A principal residence is defined as the one place where the owner has their permanent home, to which they intend to return whenever absent, and which they do not rent to another. Victor cannot claim the PRE on both his Lansing home and his Higgins Lake vacation cabin simultaneously. If he claims it on the cabin while living primarily in Lansing, he would be making a false claim, which can result in back taxes, penalties, and interest under MCL 211.7cc(3). Agents must counsel clients carefully on this restriction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Fee simple absolute is the highest and most complete form of property ownership, giving the owner unrestricted rights to use, possess, enjoy, and dispose of the property. It is of unlimited duration and fully inheritable.
Community property is a system where property acquired during a marriage is owned equally by both spouses.
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