Under Michigan's Proposal A and related property tax law, which of the following statements about the Principal Residence Exemption (PRE) is NOT accurate?
Correct Answer
B) The PRE automatically transfers to the new buyer when a home with an active PRE is sold
The PRE does NOT automatically transfer to a new buyer when a home is sold. Under MCL 211.7cc, the PRE is personal to the owner who filed the affidavit. When the property is sold, the seller must rescind the PRE, and the new buyer must independently file their own PRE affidavit with the local assessor if they qualify. The PRE never automatically carries over to a new owner — this is one of the most important and frequently tested PRE concepts in Michigan.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
A transfer tax is a tax imposed on the transfer of ownership of real estate.
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
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