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Property taxes in Michigan - homestead VS non - homestead

By Michelle Gordon

Real Estate Agent with JH Realty Partners 6501309180

March 07, 2010 10:56 PM

Another reason to buy and close on home before May 1st. You may be saying to yourself, well I do not qualify for the home buyers credit, so you are doing the lets wait and see what happens. With the anticipation of home prices dropping once again.

Well here in Michigan we have this lovely thing called NON-HOMESTEAD Property taxes.

May 1st is the dead line to file your Michigan Property tax exemption.

Why should this matter to you? Well the cost of property taxes will go up about 40% for non-homestead properties. So homes that are owned by banks, owned by HUD or where the owner has moved and bought another home will go into non-homestead status after May 1st. So when you (the owner occupant) buys this home in the non-homestead tax status, you will be paying these higher taxes till the following year, because you can only change this status at the beginning of the year............which means higher mortgage payments till you can get this changed.

With some buyers the cost is so much greater it can make or break the sale. So that 'good deal" is no longer the good deal as you may not be able to afford the mortgage payment based on non-homestead property taxes.

If you do wait to buy a home after May 1st - your lender or Realtor can look this up for you and tell you what you are getting into. Make sure your lender gives you a good faith estimate based current tax status of the home.

On line questions and answers for homestead/non0homestead property taxes

Forms for property taxes in Michigan.

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Robert L. Brown

www.mrbrownsellsgr.com - Grand Rapids, MI

Grand Rapids Real Estate Bellabay Realty, West Mic

So many people get burned by this fact. They sit on the fence then they get caught then they ask us how can WE fix it. Hmmmm

Mar 08, 2010 12:02 AM

Michelle Gordon

JH Realty Partners - Ada, MI

Finding Your Place

I know Robert............I truley do not like that the new owner can only change the status once a year, seems unfair to the new home owner, but what can we do?

Mar 08, 2010 12:43 AM

Lola Audu

Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI

Audu Real Estate~Grand Rapids, MI ~Welcome Home!

With the option of the Tax Credit and the opportunity to buy with Homestead Tax rates, buyers can really maximize the return on their investment for purchases prior to the April 30 deadline when the tax credit provision sunsets.

Mar 08, 2010 12:27 PM

Anonymous

Alex

Could someone explain this in greater detail? If the home was claimed, but the individual has since moved out is the property still in homestead or no? also, I see a lot of information about if the individual was in the home the homestead will be rescinded on December 31, 2010. Does this mean that my winter taxes will be nonhomestead or no? I guess I am just really confused :/

May 13, 2010 11:50 AM

Jan

I was certainly glad to see this post! My husband and I are leaving for Michigan (shopping for a nice place north of Clare); and are looking at some houses along the AuSable River. I did see the tax difference on a place we are looking at and needed some clarification to understand. I agree that the state tax legislators should make this credit available immediately on purchase to a new owner that intends to have this home as a legal residence. Or, the seller should prorate the taxes at the higher rate so that the purchaser gets the credit at closing, if they are not currently homesteading the property. I think this is the case with our purchase and will investigate that when writing a purchase agreement.

Aug 11, 2010 03:57 AM

Alex, I am sorry I did not see your comment till now. Call the city where this home is and ask......as I would need more information to answer to your particular situation.

Jan...hope you work it out okay, and welcome to Michigan!

Aug 15, 2010 03:43 AM

Flossi

Alex, my husband and I are first time home buyers the way I understood it was that you had to claim the homestead by May 1st or you would not get it. If your home was owned by the bank they could only own it for a year and a half and then the home stead was lost. Case in point we bought the house in June but the year and a half was up in May but because we didn't live there (cause we didn't own it) we lost the homestead credit until the next year.

Oct 21, 2010 08:59 AM

Hana C

Thanks for the information. I noticed my homestead percentage was O% accidentally and went on the hunt for more information. The information and links you offered took me right to the form I need to file and plan to do so on Monday. My parents gave me my house so I had no idea about anything that needed to be filed. Although it is after May 1 that's okay because atleast now I know. Thank you .

Nov 06, 2010 09:30 AM

Nicholas

Hello Michelle,

I hoping you can give me some advice. I recently (3 weeks ago) purchased my mom a house, however I live in Atlanta hence taxes are non- homestead. I understand that this means higher taxes. So I'm trying to figure out how can I get a break on the taxes since the responsibilty of the taxes will be my mom. What do you suggest (with adding mymom to the deed)?

Thanks ,

Mar 02, 2011 07:54 PM

Melissa

Why may 1st??? Homestead is you primary residence so a half year and a day is 365 divided by 2= 183 days. May 1st is only 160 ish

Apr 25, 2011 02:08 PM

#10

Melissa I do not know answer to this question, I wish I did. I also know the bulk of the annual bill is due in the summer, and a small portion due in the winter. Maybe one of the other Realtors on here and can help??

Apr 26, 2011 01:16 AM

Kelly

We are SD residents. We built a house in Michigan. We spend equal time in MI and SD. We would like to homestead our mich house but remain SD residents for our business there. We do not homestead any property in SD. Is this possible

Jun 09, 2016 04:38 AM

#12

shirley

I am getting ready to close on a home that is in non-homestead status. Does this mean I will be paying 40%more in taxes the first year?

May 20, 2020 02:42 PM

#13

Property taxes in Michigan - homestead VS non - homestead

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