Lending Institutions Allowed to Claim Exemption on Certain Foreclosed Property
Public Act 114 of 2012, effective May 1, 2012, changes the deadline for a property owner to file an affidavit claiming the local Michigan property tax principal residence exemption has been changed. A property owner may claim the exemption by filing an affidavit with the local tax collecting unit in which the property is located on or before May 1 for taxes levied before January 1, 2012. For taxes levied after December 31, 2011, the affidavit must be filed on or before June 1 for the immediately succeeding summer tax levy and all subsequent tax levies or on or before November 1 for the immediately succeeding winter tax levy and all subsequent tax levies.
In addition, a land contract vendor, bank, credit union, or other lending institution is allowed to retain the principal residence exemption on foreclosed property if the property is not occupied, is for sale, is not leased to any person other than the person who claimed the exemption immediately preceding the foreclosure, and is not used for any business or commercial purpose. A lending institution that retained the exemption is required to pay what it otherwise would have paid in school operating taxes and to pay an administration fee. The administration fee is retained by the local tax collecting unit.