What is the homestead exemption in Michigan and how do I claim it?

Michigan provides indexed creditor protection and a powerful school-tax exemption.

1. Two Concepts

Michigan has (a) the Principal Residence Exemption (PRE) administered by local assessors under MCL § 211.7cc and (b) a state creditor/bankruptcy homestead under MCL § 600.5451.

2. Creditor / Bankruptcy Homestead

MCL § 600.5451(1)(m) protects $46,125 in equity for 2024, adjusted every three years for inflation; debtors aged 65+ or disabled receive $69,200. These amounts apply only in bankruptcy.

3. Automatic vs Declaration

The exemption auto-attaches in bankruptcy without recording.

4. Federal Bankruptcy Cap

Michigan permits debtors to choose federal exemptions ($27,900 homestead, April 2022) or state amounts. BAPCPA § 522(p)'s $189,050 cap can apply if state law is invoked and acquisition was within 1,215 days.

5. Property-Tax Homestead

The PRE (MCL § 211.7cc) exempts a primary residence from the 18-mill local school operating tax — typically saving $1,500-$3,000 annually. The Homestead Property Tax Credit (MCL § 206.522) provides an income-tax credit for property taxes exceeding 3.2% of household income.

6. Filing Property-Tax Exemption

File Form 2368 (Principal Residence Exemption Affidavit) with the local assessor by June 1 (summer levy) or November 1 (winter levy). The exemption stays in effect until rescinded.

7. Spousal Protections

Tenancy by the entirety protects marital homes from individual-spouse judgments; both spouses must sign to convey.

8. Loss Triggers

Renting the home, claiming a homestead exemption in another state, or moving out triggers rescission. The owner must file Form 2602 to rescind.

9. Foreclosure & Forced Sale Exceptions

Purchase-money mortgages, property taxes, mechanic's liens, federal liens, and joint entireties judgments override protection.

This is legal information, not legal advice.