If you recently bought a home in Livingston County, Michigan, there is one important post-closing task you do not want to overlook: filing your Principal Residence Exemption, commonly called a PRE.
Whether you purchased a home in Brighton, Howell, Hartland, Pinckney, Hamburg Township, Genoa Township, or elsewhere in Livingston County, understanding how the PRE works can help make sure your property taxes are being calculated correctly.
The process is relatively simple, but there are a few things that commonly confuse homeowners. Your mailing address does not necessarily determine where you file, a Property Transfer Affidavit is not the same thing as a PRE, and a PRE does not prevent your taxable value from uncapping after a qualifying transfer of ownership.
Here is what Livingston County homeowners should know.
What Is a Principal Residence Exemption in Michigan?
Michigan's Principal Residence Exemption allows a qualifying principal residence to be exempt from the local school district's school operating tax, up to 18 mills.
Generally, you must own and occupy the property as your principal residence to qualify. In other words, this should be the home you consider your permanent primary residence.
A vacation home, second home, seasonal property, or most rental properties generally will not qualify as your principal residence.
It is also important to know that Michigan's Principal Residence Exemption is different from the Homestead Property Tax Credit. The PRE affects your property tax assessment, while the Homestead Property Tax Credit is associated with your Michigan income tax return.
How Do You File a PRE in Livingston County?
To claim a Principal Residence Exemption, homeowners generally complete Michigan Department of Treasury Form 2368, the Principal Residence Exemption Affidavit.
The important part is where you send it.
Your PRE is filed with the assessor for the city or township where your property is actually located. There is not one countywide Livingston County office where every homeowner files a PRE.
This can be especially confusing in our area because your mailing address and your actual municipality are not always the same.
For example, having a Brighton mailing address does not necessarily mean your property is located within the City of Brighton. Your property could actually be in Brighton Township, Genoa Township, Green Oak Township, or another municipality.
The same issue can arise with Howell, Pinckney, and other Livingston County mailing addresses.
Before filing, check your parcel information to determine which city or township has assessing authority over your property. You can find your parcel ID on your closing documents or tax information and use Livingston County's property and parcel lookup resources to verify the correct municipality.
Once you know your municipality, you can contact that local assessor to confirm how they would like Form 2368 submitted.
When Is the PRE Filing Deadline in Michigan?
Timing matters when filing your Principal Residence Exemption.
If a valid PRE is filed on or before June 1, it can apply to that year's summer and winter school tax levies, as well as subsequent levies while the property continues to qualify as your principal residence.
If you file between June 2 and November 1, it can apply to that year's winter levy and subsequent levies.
Homeowners may come across older information mentioning a May 1 PRE deadline. That is no longer the current deadline for these filings, so make sure you are using current Michigan Treasury information.
If you miss one of the deadlines, that does not necessarily mean you are permanently out of luck. Michigan Treasury provides a process for untimely PRE claims, and a local assessor may be able to grant the exemption retroactively for the current and previous three calendar years when the eligibility requirements were met for the applicable years.
If you believe you missed a deadline, contact your local assessor rather than assuming there is nothing you can do.
What Is Form 2368?
Form 2368 is Michigan's Principal Residence Exemption Affidavit. This is the form used to claim the PRE on a qualifying principal residence.
You can obtain the form through the Michigan Department of Treasury's PRE website, your local assessor, or potentially as part of the paperwork provided during closing.
Even if you receive the form at closing, it is worth confirming that it has been completed correctly and delivered to the appropriate local assessor.
Keep a copy of your completed paperwork and any confirmation you receive from the assessing office for your records.
Is the Property Transfer Affidavit the Same as the PRE?
No, and this is an important distinction for new Michigan homeowners.
The Property Transfer Affidavit, Form 2766 or L-4260, notifies the local assessor that ownership of a property has transferred. It is generally required to be filed by the new owner within 45 days of the transfer.
The Principal Residence Exemption Affidavit, Form 2368, serves a different purpose. It tells the assessor that you are claiming the property as your qualifying principal residence.
Filing the Property Transfer Affidavit does not automatically claim your PRE.
Think of them as two separate pieces of post-closing paperwork. One addresses the transfer of ownership, while the other addresses your principal-residence status.
Does a PRE Prevent Your Property Taxes From Uncapping?
No. PRE and taxable-value uncapping are two different parts of Michigan's property tax system.
After certain transfers of ownership, a property's taxable value can uncap in the following year. Your PRE does not stop that process.
Instead, the PRE affects the school operating portion of your property taxes for a qualifying principal residence.
This distinction is especially important for buyers who look at the seller's current property tax bill and assume their future bill will be approximately the same. The seller's taxable value, PRE status, and other factors may be different from what applies after you purchase the home.
That is why we always encourage buyers to look beyond the current tax bill when estimating the ongoing cost of owning a home.
What Happens When You Sell or Move Out?
Your PRE is tied to the property being your qualifying principal residence.
If you sell the home, move out, or otherwise stop occupying it as your principal residence, you may need to file Form 2602, the Request to Rescind Principal Residence Exemption, with the local assessor.
Michigan Treasury generally requires the rescission to be filed within 90 days after the property is no longer being used as the principal residence of the owner claiming the exemption.
There are special circumstances involving things like conditional rescissions, trusts, divorce, death, and other ownership situations. Those situations can have additional rules, so it is best to speak directly with your local assessor or the Michigan Department of Treasury rather than assuming the standard process applies.
A Simple PRE Checklist for Livingston County Homeowners
After purchasing a home, first make sure the property qualifies as your principal residence. Next, determine the actual city or township where your parcel is located rather than relying only on the mailing address.
From there, obtain and complete Form 2368 and submit it to the appropriate local assessor. Pay attention to the June 1 and November 1 deadlines, keep a copy of everything you submit, and check your future assessment notice and property tax information to make sure your PRE status is reflected correctly.
Also remember that your Property Transfer Affidavit is a separate filing and does not replace your PRE affidavit.
Buying a Home in Livingston County?
Property taxes can be one of the more confusing parts of buying a home in Michigan, particularly when you're trying to understand PRE status, taxable value, uncapping, city versus township taxes, and what your future payment could look like.
At Pat Lotz Real Estate Group, we help buyers throughout Brighton, Howell, Hartland, Pinckney, and the surrounding Livingston County communities understand what questions to ask before and after closing.
While your local assessor and the Michigan Department of Treasury are the appropriate sources for official PRE eligibility and filing guidance, having a local real estate team that understands how these pieces fit into the home-buying process can make the transition into homeownership a little easier.
This article is provided for general educational purposes and is not legal, tax, assessing, or accounting advice. PRE eligibility and property tax circumstances are specific to each property and homeowner. Verify current requirements with the Michigan Department of Treasury and the assessor for the city or township where your property is located.
