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HB 5998

Property tax: exemptions; exemption for certain remodeling and renovations; provide for. Amends sec. 27 of 1893 PA 206 (MCL 211.27).

2025-2026 Regular Session Introduced by Tyrone Carter and 2 co-sponsors

Allows a one-time, capped exemption for principal residence remodeling over $100k completed after 2026, reducing value increases for property tax.

bill electronically reproduced 05/20/2026
#propertytax:assessments #propertytax:exemptions
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Bill Summary · HB 5998

Bill overview

HB 5998 amends the Michigan General Property Tax Act (1893 PA 206) to modify how true cash value (TCV) is determined in certain cases, and to add a targeted exemption for principal residences undergoing remodeling or renovation. The act is scheduled to take effect 180 days after enactment.

Main purpose and intent

  • Align the assessment approach for residential property with a focus on normal repairs and maintenance, and provide a one-time, capped exclusion for large remodeling or renovation projects on a primary residence completed after January 1, 2027.
  • Introduce a temporary, later-year threshold to exclude a portion of value increases attributable to remodeling/renovation from real property tax assessments, reducing immediate tax impact on homeowners undertaking substantial improvements.

Key provisions and changes

  1. True cash value definition (existing framework preserved with clarifications)

    • Retains the standard definition of TCV, including considerations of location, land quality, income potential, resources, and other factors.
    • Confirms that certain state or utility-related values are not controlling for assessment purposes.

  2. Exclusion for normal repairs and maintenance (residential property)

    • The assessor may not consider value increases from normal repairs, replacement, and maintenance when determining TCV, unless the property is sold.
    • Specifies that certain upgrades (a) through (q) listed in subsection (2) are treated as normal maintenance if they are not part of a structural addition or completion. Examples include exterior painting, siding/roof work, weatherproofing, rewiring, plumbing/fixtures, insulation, energy systems under 150 kW, and whole-home generators.

  3. Sales data exclusions for certain costs

    • Requires excluding from real estate sale data the following if included in the purchase price: financing costs, personal property included in the sale, and surveying costs.
    • Purchasers may file an affidavit identifying these amounts; counties may receive copies for recording.

  4. Agricultural and nonprofit housing provisions

    • Maintains rules for agricultural property sales studies and requires review if affidavits under section 27a(7)(o) are not filed.
    • Establishes special treatment for transfers of eligible nonprofit housing property to low-income buyers, determining presumptive true cash value based on consideration/loan amounts and applying annual adjustments per section 27a in subsequent years.

  5. Standards for certain property types

    • For standard tools, true cash value is tied to net book value per GAAP, not tax depreciation.

  6. Principal residence remodeling/renovation exemption (new, targeted provision)

    • A remodeling/renovation that increases TCV is not counted for assessment purposes if:
      • It is not a normal repair/maintenance.
      • The improvement amount is less than $100,000 (the excess above $100,000 is excluded from the counted increase).
      • The remodel/renovation is completed on or after January 1, 2027.
      • Applies to a single remodeling event per property owner.
  • Definitions:
    • “Principal residence” follows existing definitions.
    • “Remodeling or renovation” covers substantial changes to space, purpose, or layout, beyond routine updates.

Affected parties

  • Homeowners with principal residences planning substantial remodeling or renovation projects after 2027.
  • Assessors, local assessing offices, county equalization departments, and the State Tax Commission, which administer assessment data, exemptions, and sales data adjustments.
  • Nonprofit housing organizations and buyers involved in qualifying nonprofit-to-low-income-property transfers, with ongoing valuation adjustments.

Procedural and timeline notes

  • Effective date: 180 days after enactment.
  • Remodeling/renovation exemption applies to projects completed after January 1, 2027.
  • The bill requires specific affidavits and handling of sale data adjustments, affecting how sale prices and related costs are treated in assessments.

Compiled from official sources — confirm details with the bill’s official record.

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