The Principal Residence Exemption Program

The Principal Residence Exemption program is a product of the property tax reforms put into place by legislation in 1994 known as "Proposal A," which raised sales tax to 6% and reduced property tax millage on a principal residence.

There are four different "forms" to be used with Principal Residence Exemption Affidavit program.  

1. The form that is most commonly used today is the Principal Residence Exemption Affidavit (Form 2368) This form is used to claim a homestead exemption on your principal residence.  Partial homestead exemptions are available for multi-family housing.  

   What is your principal residence?

   • The home that you return to after you have been away
   • The address at which you are registered to vote
   • The place listed on your driver's license
   • The address which is listed on your income tax return 
   • The school district where your children attend school, etc.

   It is NOT the cottage, NOR the summer condo, NOR the weekend getaway home, NOR the rental property.    It is also NOT the property with the highest value if you do not live there.  The key item to remember is you MUST OWN AND OCCUPY your principal residence by May 1.

2. The next form used is the Request to Rescind/Withdraw Principal Residence Exemption (Form 2602).  This form is to be used to change the use of your principal residence to something else such as a rental house or secondary home.
    
3. The third form, put into effect on April 8, 2008 when Governor Granholm signed House Bill 4215 enacting Public Act 96 of 2008, is called the Conditional Rescission of Principal Residence Exemption (Form 4640).  This new form enables a person who has established a new principal residence to retain a Principal Residence Exemption (PRE) on property previously exempt as the owner’s principal residence that is not occupied and for sale. 

    

   The conditional rescission allows an owner to receive a PRE on his or her new property and on previously exempted property simultaneously if certain criteria are met.  An owner may receive the PRE on the previous principal residence for up to three years if that property is not occupied, is for sale, is not leased or for lease, and is not used for any business or commercial purpose.  The opportunity to apply and qualify for a conditional rescission begins for the 2008 tax year and is not retroactive to previous tax years.  To qualify for the conditional rescission in 2008, Form #4640 must be submitted to the assessor of the local unit of government where the property is located on or before May 1, 2008.  Contact the assessor for additional details.
    
4. The fourth form, Claim for Farmland Exemption (T-1063), is for non-agriculturally classed property devoted primarily to agricultural uses.  Please check with the Township Assessor for more information on this form.
   

These forms are very significant financially to your as a homeowner.  If you fail to file a homestead exemption claim when your property is eligible, you will pay too much tax (approximately $18.00 per $1,000 of taxable value).  If you fail to rescind the exemption when the property is no longer your principal residence, you could be billed for additional taxes, penalty, and interest.

Each of these forms is also available at the Park Township Assessor's Office and must be filed with the Assessor.

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