There's always a lot of talk with regard to property taxes in the state of Michigan, and one area that can be a bit confusing to folks — especially first time homebuyers — is the Homestead Property Tax Credit (HPTC).
The HPTC is a way to offset the cost of the property taxes on your home in the state of Michigan. Not every property qualifies. In order to be able to claim this tax credit, the property that you were filing it on must be your permanent home in Michigan and used as a principal residence (or homestead) and you must be a resident of the state for at least six months. Other criteria also apply.
Filing for a Homestead Property Tax Credit is easy: you simply submit the Homestead Property Tax Credit Form (MI-1049CR) along with your Michigan Individual Tax Return (MI-1040). (If you are not required to file a MI-1040, the HPTC may be filed on it's own by April 15.) Alternate forms are used by eligible veterans or their surviving spouses, active-duty military and those who are blind.
When you purchase a home intended to be your principal residence in Michigan, another form, a Principal Residence Exemption (PRE) Affidavit, is filed the with local assessor in the municipality where the property is located. The PRE Affidavit is separate from the HPTC and can be filed by the title company that handles the closing (or the new owner can do it on their own). More details on that can be found by clicking here.
It seems important to note that during the process of looking for a home to purchase, the property tax amount on some homes may reflect an amount that is higher then comparable properties that you've seen. That may be due to the possibility that the current owner uses it as an income property.
For more, including how qualified health insurance premiums and other criteria may affect the Homestead Property Tax Credit, click here.
Chris Glahn is a licensed Realtor in the state of Michigan with RE/MAX Platinum Ann Arbor. He can be reached at 734-730-3403.
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