Michigan homeowners have two separate ways to pay less property tax, and many people qualify for both. The principal residence exemption lowers the tax bill itself. The Homestead Property Tax Credit pays back part of the tax you paid, through your state income tax return, and renters can claim it too [1][3].
At a glance
- Principal residence exemption
- Exempts your home from up to 18 mills of school operating tax [3]
- How to get it
- Form 2368 to your city or township assessor by June 1 or November 1 [3][4]
- Homestead credit, 2025 maximum
- $1,900 for most filers [1]
- Homestead credit income limit
- $71,500 in total household resources [1]
- Renters
- Generally count 23% of rent as property tax [1]
The principal residence exemption (PRE)
If you own and live in your home as your main residence, it can be exempt from the tax that local school districts levy for operating purposes, up to 18 mills [3][4]. A mill is $1 per $1,000 of taxable value, so on a home with a $100,000 taxable value, 18 mills is $1,800 a year.
To qualify you must be a Michigan resident who owns and occupies the home as your principal residence [3].
How to claim it
- Get Form 2368, the Principal Residence Exemption Affidavit. Closing agents usually hand it to you when you buy a home [3].
- File it with the assessor for the city or township where the home is, not with the state [3].
- Watch the deadline [4]:
- by June 1 to cover that year’s summer tax and every levy after it,
- by November 1 to cover the winter tax and every levy after it.
The exemption stays in place as long as the home stays your principal residence.
The Homestead Property Tax Credit
This is a state credit for part of the property tax you pay on your home, whether you own it or rent it. It’s claimed on Form MI-1040CR, separate from the exemption above [1][3].
| Rule | 2025 amount |
|---|---|
| Maximum credit (most filers) | $1,900 |
| Total household resources limit | $71,500 |
| Credit starts shrinking above | $62,500 (10% less per $1,000 over) |
| Home's taxable value limit (owners) | $165,400 |
| Share of rent counted as property tax | 23% |
| Michigan residency | At least 6 months of 2025 |
Who can claim it
You can claim the credit for 2025 if [1]:
- your homestead is in Michigan,
- you lived in Michigan at least six months of 2025, and
- you owned the home and property taxes were levied on it in 2025, or you paid rent under a lease or rental contract.
You can’t claim it if your total household resources are over $71,500, or if you own a home whose taxable value is over $165,400 (vacant farmland classified as agricultural doesn’t count toward that) [1]. A vacation home or rental property doesn’t count as your homestead [1].
How the credit is figured
For most filers, the credit is 60% of the amount by which your property taxes exceed 3.2% of your total household resources, capped at $1,900 [1][2]. Seniors with lower incomes can get a larger share: up to 100% of that amount when household resources are $21,000 or less [1].
Renters generally treat 23% of the rent they paid as their property tax [1]. Above $62,500 in household resources, the credit drops by 10% for every $1,000 (or part of $1,000) over, reaching zero above $71,500 [1].
How to claim it
- If you file a Michigan income tax return, include the MI-1040CR with your MI-1040. For 2025, that meant filing by April 15, 2026, to be on time [1].
- If you don’t have to file a return, you can still file the MI-1040CR by itself once you know your 2025 household resources and property taxes [1].
- Missed it? The last day to claim a 2025 credit is April 15, 2030 [1].
Blind homeowners, eligible veterans and some active-duty military can also fill out Form MI-1040CR-2 and use whichever form gives the larger credit [1].
Sources
Common questions
What is the income limit for the Michigan Homestead Property Tax Credit?
For the 2025 tax year, total household resources of $71,500 or less. The credit starts shrinking above $62,500, by 10% for each $1,000 over that amount.
What is the maximum Homestead Property Tax Credit?
$1,900 for most filers for the 2025 tax year. Renters and homeowners can both claim it; renters generally count 23% of the rent they paid as property tax.
When is the deadline to file the principal residence exemption in Michigan?
File Form 2368 with your city or township assessor by June 1 to cover that year's summer and winter taxes, or by November 1 to cover the winter tax.