Real Estate Property Tax Exemptions in Michigan

In order to promote the development of certain types of real estate or to rehabilitate old buildings and communities, Michigan provides property tax exemptions to eligible homeowners and businesses that can be worth thousands of dollars every year. The following is a list of common property tax exemptions in the state that apply to both commercial businesses and homeowners.

Commercial Rehabilitation Act

Commercial property that is 15 years old or older can receive a tax abatement. The exemption applies to businesses and multi-family residential facilities.

Commercial Facilities Exemption

Businesses and investors who restore or construct new commercial property to replace obsolete facilities can receive a property tax abatement for up to 12 years. Commercial property under this exemption includes any business enterprise, including office space.

Industrial Facilities Exemption

In some situations, manufacturers who renovate or expand aging facilities, build new facilities or establish high tech facilities can receive a property tax exemption for up to 12 years. The facility must be located within an established Industrial Development or Plant Rehabilitation District.

Obsolete Property Rehabilitation Act

Qualified rehabilitated property can receive a tax exemption for up to 12 years. The local unit of government approves the property as rehabilitated, bases the property tax on the building's taxable value prior to rehabilitation and freezes the property tax at that value for the length of the exemption.

Principal Residence Exemption

A homeowners' primary residence receives a property tax exemption.

Supportive Housing Exemption

Supportive housing is housing owned by a non-profit organization with tax-exempt status that is occupied by one or more people with incomes below 30 percent of the median income for the area. In order to qualify for the tax exemption, the non-profit must provide services to the residents of the home, such as help with daily living.

Neighborhood Enterprise Zone Act

Eligible property in distressed communities can receive a property tax exemption. Eligible Distressed Areas are municipalities that average higher levels of economic distress than the rest of the state.

New Personal Property Exemption

Businesses listed by the Michigan Economic Growth Authority that are located in distressed communities can receive a property tax exemption for any number of years. Eligible businesses include "manufacturing, mining, research and development, wholesale trade and office operations." Retail businesses are not eligible.

Air and Water Pollution Control Exemption

Facilities that control or dispose of air pollution can receive both sales and property tax exemptions. The Michigan Department of Environmental Quality must approve of the facility by finding that the facility is "suitable and reasonably adequate" and operated primarily for the control, capture or removal of air pollutants.

Facilities that control, capture or remove water pollution are also eligible for a property tax exemption.

Contact an Attorney

This article is a brief overview of some potential property tax exemptions available in Michigan; for a more thorough analysis contact an attorney knowledgeable regarding property tax exemptions and appeals to discuss your situation.