Michigan Poverty Exemption from Property Taxes
Overview
Taxpayers must apply for a poverty exemption from the property taxes on their home every year. Every municipality is required to have an income test and an asset test.
The exemption is not always a full exemption (meaning all taxes are exempted). Usually it is only a partial exemption. There are several things you must do to get the exemption:
- Exemption is only on your principle residence;
- You must apply for the exemption each year;
- Your household income must be lower than what your township requires (income test); and
- The value of your assets must be lower than what your township requires (asset test).
If you are struggling to pay your property taxes, you should also consider appealing the value that the assessor has placed on your property.
If the assessor rejects your poverty exemption application (because it is somehow incomplete), you must make sure it is corrected so that it will be reviewed by the Board of Review. If your application is denied, there are three additional steps to appealing the denial to the Michigan Tax Tribunal.
IMPORTANT LINKS
- Michigan Specific Rules and Forms
- State Tax Commission Bulletin 3 of 2021
- Michigan's Poverty Exemption Fact Sheet
Applying to your local Board of Review for a poverty exemption from Michigan property taxes
Taxpayers must apply for the poverty exemption every year. Every municipality is required to have an income test and an asset test.
The exemption is not always a full exemption (meaning all taxes are exempted). Usually it is only a partial exemption. There are several things you must do to get the exemption:
- Exemption is only on your principle residence;
- You must apply for the exemption each year;
- Your household income must be lower than what your township requires (income test); and
- The value of your assets must be lower than what your township requires (asset test).
If you are struggling to pay your property taxes, you should also consider appealing the value that the assessor has placed on your property.
Step 1: Get the application from your local assessor
- Every township must have a formal application form. Make sure you have your township's form.
- Some assessors may send you an application by mail, but it is at the township's discretion. Many townships have part-time assessors who are at the office very limited hours. Call ahead to make sure they are there to pick up an application.
- A new law passed in 2020 requires townships that have a website to make the application available on their website.
Step 2: Complete the application and submit to the local assessor
- It is important to fill in the application completely! If a question does not apply to you, put "N/A" as the answer.
- Attach all of the supporting documents that the township requires to consider your application.
- You must satisfy the township's income test and asset test. They are obligated to tell you what those tests are. These tests may be in the application materials, on their website, or somehow posted at the township assessor's office.
Step 3: Wait for Board of Review determination
- It may be some time before you get a determination, it is crucial to make sure that you actually receive a determination!
- If your application is granted, the letter should inform you of how much exemption you received and let you know about your new (lower) property tax amount.
If the Board of Review denies your application for a poverty exemption
After you have applied for a poverty exemption from your local assessor, you can appeal if the assessor denies your application.
Step 1: TIMELY File an Appeal to the Michigan Tax Tribunal (MTT)
- YOU MUST FILE THE PETITION WITH THE MTT:
- If you were denied by the March Board of Review, you must appeal by July 31 following your denial.
- If you were denied by any other Board of Review (July or December), then you must appeal to the MTT within 30 days of the date of the denial letter
- There is no filing fee!
- The petition is a fill-in PDF form; download the Property Tax Appeal Petition form.
- Make sure the petition is fully completed and you have attached a copy of your denial letter from the township/city.
- Mail the petition to the MTT at this address: Michigan Tax Tribunal, P.O. Box 30232, Lansing, MI 48909
- For any questions that are not answered in these instructions please see the Michigan Tax Tribunal's website or contact the MTT at 517-335-9760. DO NOT CALL THE MUNICIPALITY WITH QUESTIONS ABOUT THE MTT.
- TIP: Use some kind of tracking to make sure they receive the petition.
Step 2: Submit evidence to the MTT once you have received your notice of hearing
- You will get a notice of hearing 45 of days before the hearing.
- That notice will have a deadline for submitting your evidence, the documents that prove you are entitled to a poverty exemption. The deadline for submitting evidence is 21 days before the hearing.
- You will need to submit the same documents (and maybe additional documents) to the MTT that you submitted with your application to the Board of Review.
Step 3: Attend the Michigan Tax Tribunal hearing, which will be near where you live
- Hearing will usually take place in the county where you live.
- Hearing is held by an impartial MTT hearing referee.
- Hearings last about 30 minutes and are rather informal.
- Bring a copy of all of the documents you submitted to the hearing.
- You will have a chance to talk to the hearing referee about your case.
Definitions
Asset Test: Maximum amount of value of taxpayer's belongings that they may have to qualify for a poverty exemption.
Household Income: Total income of all people living in taxpayer's home. Does not include tenants who pay rent to live in home.
Income Test: Maximum amount of household income that taxpayer may receive to qualify for a poverty exemption. Usually includes all forms of payments to taxpayer, even if they are not taxable.
Poverty Guidelines: Amount of income that defines poverty based on the number of people living in the home.