Request for Principal Residence Exemption May Result in Refund of Tax
Public Act 140 of 2013, effective October 22, 2013, requires a process be established by which property owners may file a request with the Michigan Department of Treasury for a property tax principal residence exemption (PRE) for property owned and occupied by the owner in any year before the three immediately preceding tax years if the PRE was not on the tax roll due to a qualified error on the part of the local tax collecting unit, and the property owner owned and occupied the property within the applicable dates by which an affidavit for a PRE must be filed. A "qualified error" means the same as that term is defined in §211.53b, M.C.L.
If the department approved the request and the exemption then results in an overpayment of tax by the property owner, the department must notify the treasurer of the local tax collecting unit, the county treasurer, and other affected officials. Local records must be corrected to account for the granting of the exemption consistent with procedures established by the department.
Any overpayment by the property owner, including any interest paid, must be rebated within 30 days of receiving notice from the department granting the exemption. The rebate would be without interest. The treasurer in possession of the tax roll may deduct the rebate from the appropriate tax collecting unit's subsequent distribution of taxes and must bill to the appropriate tax collecting unit the unit's share of taxes rebated. A local tax collecting unit that is responsible for a qualified error must reimburse each county treasurer and other affected local official required to correct official records for the costs incurred.
If the property owner received a PRE in any year before the three immediately preceding years, but was not entitled to the PRE due to a qualified error on the part of the local tax collecting unit, the department may deny the principal residence exemption. If the department denied the PRE, the property owner must be issued a corrected or supplemental tax bill with interest accruing 60 days after the date the corrected or supplemental tax bill was issued. Also in this case, the local tax collecting unit that is responsible for the qualified error must reimburse the county treasurer and other affected local officials for the costs incurred.