SB 192 — Summary (introduced Jan 23, 2025)
Title: Property tax: exemptions; freeze of taxable value for primary residences of certain senior citizens; provide for (adds Sec. 7zz to 1893 PA 206, MCL 211.1–211.155)
Status: Referred to Committee on Finance, Insurance, and Consumer Protection
Purpose
- Establish a partial property tax exemption that effectively "freezes" the taxable value of qualifying primary residences for certain long‑term, lower‑income homeowners (primarily seniors), reducing their property tax liability.
Key provisions
- Effective date: Applies to taxes levied after December 31, 2025.
- Eligibility (all must be met):
- Ownership: Property must be owned by the individual, the individual's spouse, or certain close relatives (parents, siblings, children, adopted children, grandchildren, etc.) of the individual or spouse.
- Occupancy/tenure: Either
- the claimant is at least 63 years old and has continuously used the property as their primary residence for at least the immediately preceding 10 years; or
- the claimant has continuously used the property as their primary residence for at least the immediately preceding 30 years (age not required in this second pathway).
- Income: Total gross income of the individual and household members for the current tax year must not exceed $40,000 (uses the definition of "gross income" from Michigan income tax law).
- Exemption calculation:
- The exemption amount = (current taxable value of the primary residence) − (base amount).
- Base amount = taxable value in the claimant’s base year adjusted for subsequent losses and additions.
- Base year = tax year the claimant first applies and qualifies; subject to adjustment if a later year’s taxable value is lower (with a limited exception for temporary irregularities).
- Limitations:
- Married individuals who maintain separate primary residences: only one spouse may claim the exemption and only for one residence.
- Administration:
- The Michigan Department of Treasury must adopt implementing rules under the Administrative Procedures Act.
Who is affected
- Beneficiaries: Older and long‑term homeowners who meet the age/tenure and $40,000 household income tests; property can be held by certain family members.
- Others affected: Local taxing jurisdictions (counties, municipalities, school districts) and taxing authorities — potential reduction in property tax collections for eligible properties; local tax administration will need to process claims and verify eligibility.
Procedural/timeline notes
- Applies to tax years with taxes levied after 12/31/2025.
- Implementation requires rulemaking by the Department of Treasury; claim procedures and verification standards will be set through that process.
- Current status: Introduced Jan 23, 2025; referred to the Senate committee noted above.
Potential impacts and considerations
- Fiscal: Reduced taxable values for qualifying properties will lower property tax revenue raised from those parcels; total state/local revenue impact depends on take‑up and number of eligible homeowners.
- Administrative: Verification of continuous occupancy, household income, family ownership relationships, base‑year calculation, and tracking of additions/losses will add workload to local assessors and state treasury.
- Equity/policy: Targets property tax relief to long‑term, lower‑income residents; limits (income threshold, occupancy rules) narrow eligibility compared with universal relief measures.
