Michigan property tax - homestead and non-homestead explained

I had a Redford home buyer tell me today that she thought if she bought a house that had non-homesteaded taxes that it would always be non-homesteaded taxes. They didn't want to look at houses with non-homesteaded Michigan taxes because they thought they would forever be paying higher property taxes.

That's not the way it works. A Metro Detroit home becomes non-homesteaded if the property owner does not claim it as their primary residence and claim a homestead exemption.

Examples of when a property is non-homesteaded are:

• a bank foreclosure
• a home that the owner has died
• a home that the owner has moved out of state or out of the country
• a home that is a rental property
• a home that is owned by somebody that has another home with a homestead exemption
• a second home
• a vacation home

Cities only change a home's property tax status from non homestead taxes to homesteaded on May 1. So if you buy a bank foreclosure on June 30 you will have to pay the higher non homesteaded tax rate until next year. On May 1 it would change to homesteaded taxes if you filed the homestead exemption with the city prior to May 1.

So I hope this explanation about Michigan property taxes did explain more about homestead and non-homesteaded taxes. So you can look and buy a home with non-homesteaded property taxes. If you file your homestead tax exemption you will be paying the lower taxes after May 1 rolls around.

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