If you are a Michigan homeowner who has recently purchased another home and you are unable to sell your old Michigan home, Michigan law may provide some relief. Michigan homeowners may simultaneously claim a Principal Residence Exemption on two properties so long as certain conditions are met.
The law allows property owners who have established a new principal residence to retain a Principal Residence Exemption on property once exempt as the owner’s principal residence for up to three years if (1) the property is not occupied (2) the property is for sale, (3) the property is not leased and, (4) the property is not used for any business or commercial purposes.
In order to take advantage of this law, one must file a Conditional Rescission of Principal Residence Exemption (Form 4640) to the assessor for the city or township where the property is located on or before May 1 of the first year of the claim. For example, in order to qualify for the 2012 exemption a property owner must file the form by May 1, 2012. This exemption is available for up to three years so long as all the above requirements are met. In addition to the May 1 filing requirement, the owner must annually submit form 4640 on or before December 31 verifying to the assessor that the property for which the Principal Residence Exemption meets the above requirements. In the example above, if the conditional rescission was approved for 2012, the owner would have to submit a new form by December 31, 2012 to verify qualifications for the 2013 tax year.
