October 24, 2003

Individuals who have improperly claimed Michigan Homestead (Principal Residence) Exemptions have just one week left to withdraw those exemptions and pay any back property taxes that are owed. Under PA 105 of 2003, persons who are currently claiming an improper exemption have until November 1, 2003, to come forward and withdraw their homestead affidavit. By doing so, individuals agree to pay back property taxes, but will avoid interest or penalties. After November 1, 2003, interest of 1.25 percent per month, and applicable local penalties will be added to the tax bill.

PA 105 not only enhances the Department of Treasury’s process of auditing Homestead Exemptions, it also gives local assessors, county treasurers, and equalization directors in 61 counties authority to deny exemptions. Exemptions can be denied for the current year and three prior years. The counties that have elected to audit Homestead Exemptions are listed below. The Department of Treasury will be responsible for audits in counties that have opted out of the program.

According to the Homestead Exemption statute, persons claiming a homestead or similar exemption in another state or persons, other than military personnel, who file a Michigan income tax return as a non-resident do not qualify for a state Homestead Exemption. PA 105 also clearly states that persons who own and occupy their home as their Principal Residence may claim only one Michigan Homestead Exemption.

Incorrectly claimed Homestead Exemptions take money away from local school districts and place a financial burden on the state, because the School Aid Fund must make up the difference in each school district’s per pupil foundation allowance.

Based on recent pilot projects, it is estimated that between one and one and a half percent of all Homestead Exemptions around the state are wrongfully claimed. This summer, the Michigan Legislature adopted a budget that anticipates the combined state and local effort to generate approximately $50 million in the 2004 fiscal year.

Below is a complete list of counties that will participate in the Homestead Exemption enforcement effort. For more information, log onto Treasury’s web site at www.michigan.gov/treasury.

Opt-in Counties

Alcona, Alger, Allegan, Antrim, Arenac, Baraga, Bay, Benzie, Berrien, Calhoun, Cass, Charlevoix, Cheboygan, Chippewa, Crawford, Delta, Emmet, Genesee, Gladwin, Gogebic, Grand, Gratiot, Hillsdale, Houghton, Ingham, Ionia, Iron, Isabella, Jackson, Kalamazoo, Kalkaska, Kent, Lapeer, Leelanau, Lenawee, Marquette, Mecosta, Menominee, Midland, Missaukee, Montcalm, Montmorency, Muskegon, Newaygo, Oakland, Ogemaw, Ontonagon, Osceola, Oscoda, Otsego, Ottawa, Presque Isle, Roscommon, Saginaw, Sanilac, Schoolcraft, St. Joseph, Van Buren, Washtenaw, Wayne, Wexford.