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Michigan Homestead Exemption (PRE)

Just bought a home? Make sure you are not paying the higher Non Homestead tax rate. Here is how the Principal Residence Exemption works and how to claim it.

What It Saves Uncapping How to Claim Official Guidelines
Step 1 of 4

What It Saves

How much your taxes can go down

When you buy a home that was used as a rental or second home (Non Homestead), the tax bill you inherit from the seller is higher. Once you file to claim it as your primary residence (Homestead), your taxes typically drop by about 25% to 35%.

Removes18 millsSchool Operating Tax
Typical savings25% to 35%of your total tax bill
1 mill equals$1 per $1,000of taxable value

Example

Taxable Value$100,000
×
18 mills0.018
=
You save$1,800 / year

A taxable value of $100,000 is roughly a $200,000 market value home. Total millage in Macomb County usually ranges from 35 to 55 mills, so removing 18 mills is a big drop.

Uncapping →
Step 2 of 4

Uncapping

Why taxes can still go up the first year

The Homestead exemption makes your taxes lower than a Non Homestead property, but your bill may still go up in the first year after you buy.

1

The seller's taxes were "capped." While someone owns a home, Michigan limits how fast its Taxable Value can rise each year.

2

A sale "uncaps" it. The year after a sale, the Taxable Value jumps up to the current Assessed Value, which is 50% of market value.

3

The result. If the seller owned the home for many years, your new bill can be higher than theirs, even with the 18 mill Homestead discount.

Tip: Don't budget using the seller's tax bill. Ask us for an estimate based on your purchase price before you buy.
← What It SavesHow to Claim →
Step 3 of 4

How to Claim

File the form, it is not automatic

Your tax status does not change on its own. You must file a form with your local city or township assessor.

Download Form 2368 (PRE Affidavit)

Deadlines

File byJune 1to lower your Summer tax bill
File byNovember 1to lower your Winter tax bill

Quick checklist

  • You own the home and live in it as your primary residence
  • Fill out Form 2368 with your parcel number and closing date
  • Turn it in to your city or township assessor
  • Check your next tax bill to confirm the exemption shows
Selling or moving out? Let the assessor know when the home is no longer your primary residence.
← UncappingOfficial Guidelines →
Buying a home in Macomb or Oakland County?
Call Rrok Koleci at (586) 229-1500 and we will help you estimate your new taxes before you buy.
General information only, not legal or tax advice. Check with your local assessor for your property.