May 1st Is The Deadline To Qualify For a

Special Principal Residence Tax Exemption

Article courtesy of

Southwestern Michigan Association of Realtors

ST. JOSEPH, MI – “If you currently own two residential properties in Michigan, one your previous principal residence which is for sale and the other one your current principal residence, you may be eligible to claim both as a homestead if you meet certain criteria under Public Act 96, which was recently signed into law”, according to Gary Walter, EVP, of the Southwestern Michigan Association of REALTORS, Inc.

This act enables home sellers who have established a new principal residence in the state to retain a Principal Residence Exemption on his or her new residence and on the previously exempted property simultaneously if certain criteria are met. To qualify the property can not be occupied, leased, or used for any business or commercial purpose and the property must be for sale.

Sellers must complete the “Conditional Rescission of Principal Residence Exemption Form #4640" form from the Department of Treasury at www.michigan.gov/taxes or at the Michigan Realtors site at www.mirealtors.com/news/documents/4640.pdf and submit it to the local assessor where the property is located on or before May 1, 2008.

The opportunity to apply and qualify for a conditional rescission begins for the 2008 tax year and is not retroactive to previous tax years. The Board of Review has no authority with regard to a conditional rescission and cannot institute a conditional rescission on behalf of an owner if a deadline is missed or for previous tax years. An owner must annually submit Form #4640 on or before December 31 to verify to the assessor that the property for which the PRE is retained is not occupied, is for sale, is not leased, and is not used for any business or commercial purpose.

A Frequently Asked Questions sheet to address various issues related to the new conditional rescission is posted at www.michigan.gov/taxes.

If you have any questions regarding conditional rescissions, please feel free to contact the PRE Unit at (517) 373-1950 or email Patrick Huber, Manager of the Property Tax Exemption Section, at huberp@michigan.gov.

The Southwestern Michigan Association of REALTORS, Inc. is a professional trade association for real estate licensees and ancillary service providers for the real estate industry in Van Buren, Berrien and Cass counties. The Association is located at 3123 Lake Shore Drive St. Joseph, MI 49085, (269) 983.6375. They can also be contacted through their web site, www.swmar.com.