Office Building Constructed on Adjacent Parcel Disqualified it from Exemption
In Koester v. County of Saginaw, Michigan Court of Appeals, No. 300141, November 10, 2011, a taxpayer that owned two contiguous parcels of property was denied a local Michigan principal residence property tax exemption on one of the parcels because the parcel had human occupants. At the time the taxpayer purchased the second parcel at issue in this case, the taxpayer was granted a principal residence exemption because the property was contiguous and adjacent to the parcel containing his dwelling. However, a year after the purchase, the taxpayer obtained a special permit to construct an office building on the second parcel. The office building was used to operate the taxpayer's construction business. Therefore, the parcel did not qualify for an exemption because it was not "unoccupied" as that term was used in the homestead exemption provision. Moreover, because the taxpayer used the building for business purposes, the building did not constitute an "other structure" that was part of his principal residence.
The taxpayer also was not entitled to a partial exemption for the areas that he did not occupy exclusively for business purposes. Although the homestead exemption provision allowed for an exemption for all of an owner's unoccupied property that adjoined or was contiguous to his dwelling, the provision made no mention of partial occupation.