Michigan Property Tax Information

Tax Breaks for Ordinary Home Owners

Michigan's lawmakers have provided ways to reduce the burden of property tax levies on ordinary home owners. By ordinary, I mean someone who is not a senior citizen, a physically or mentally impaired person or some other special category of property owner which might qualify one for a tax break. Regular working stiffs, should make sure they explore the following mechanisms for relief of financial burdens from property taxes:

The Mortgage Credit Certificate is a federal income tax relief program tied to mortgages issued in Michigan. Every person considering the purchase of a new home should consider obtaining an MCC. If you can secure an MCC you will be getting one of the best tax breaks available to Michigan's homeowners. Surprisingly, many Michigan families can qualify for this benefit when they are beginning their lives together.




In Michigan, every person is entitled to an important exemption which applies to the locally levied millage rate. There is a business and commercial millage rate, and a usually much lower "homestead" rate. The homestead rate is often 30 to 40 percent less expensive than the nonhomestead rate. This link takes you to a document which fully outlines the rules which apply to homestead tax rates. It is long, but it is also written in a very readable form. Importantly, most of you will have been automatically qualified for this tax exemption, but if you are uncertain, or if you have any questions, this document should be of great help.




Homestead CreditRefund of Taxes in Excess of 3.5% of Household Income (Known as Circuit Breaker Law - Acquired by filing Homestead Credit Form 1040CR). Under Michigan law, every homeowner except the most affluent, is entitled to protection from being taxed out of their homes. The protection is provided in the form of a refund of excess property taxes. The refund is provided by filing an income tax form. Please note, you do not have to have an income which requires you to file income taxes to obtain this credit. This credit is a great benefit for college students living in apartments. People without a job who rent apartments and those who have had some setback in life that causes the tax burden from their home to become more than 3.5 percent of their total household income routinely qualify.



2005 Home Heating Tax Credit Form. If you qualify for the Homestead Credit, you should look into this credit too.




There also exists a "Hardship" exemption from ordinary (ad valorem) property taxes. It may be invoked when financial circumstances make the property tax an excessive burden as defined by state law and local ordinance. The exemption may be a partial (or sometimes complete) exemption from the annual property tax burden. It can be secured by petitioning the local property tax Board of Review at its meetings in March, July or December of each year. The exemption is provided in one year increments and is not renewable from year-to-year. However, an applicant can file for an exemption every year and if the applicant meets the criteria for a poverty exemption, the local Board of Review can choose to grant the exemption more than once.

Specific exemptions exist for those facing a specific special assessment levy. Sometimes, local jurisdictions include exemption provisions as an a "deferment ordinance" when crafting a special exemption project. Most jurisdictions do not. As an alternative, there is the deferment referenced above which is authorized by statute. It is granted by the state of Michigan in exchange for a lein being placed against the property being specially assessed.


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