Are you a disabled veteran, the unremarried surviving spouse of a deceased disabled veteran, or part of a household with income and assets below certain poverty guidelines? If so, you might be eligible for financial relief. You may not have to pay some of the real estate property taxes on your home.
Disabled veterans.
If you are a disabled veteran, you can be exempt from paying real estate property taxes on your homestead. In order to qualify for this exemption, you have to meet some statutory requirements. Firstly, you have to be a disabled veteran as defined by Michigan Public Act 161 of 2013, as amended.
You are a disabled veteran under the Act if you have been honorably discharged from the armed forces of the United States and meet one of the following criteria: 1) have been determined by the US Department of Veterans Affairs to be permanently and totally disabled as a result of military service and entitled to veterans’ benefits at the 100% rate; 2) have a certificate from the US veterans’ administration that you are receiving or have received assistance due to disability for specially adapted housing; or 3) have been rated by the US Department of Veterans Affairs as unemployable.
You also have to own your home which is used as your homestead. If you own your home jointly with anyone other than your spouse, you will not qualify for the exemption. If you are a renter, you are not eligible for the exemption. Although the Michigan State Tax Commission allows your home to be in your revocable living trust so long as only you and your spouse are the only current beneficiaries of the trust, some assessors are denying the exemption unless your home is titled in your individual name.
To qualify for the disabled veterans exemption, your home has to be used as your homestead, even if you have not signed up for the principal residence exemption. It cannot be used for any purposes other than your homestead. If you rent any part of it or use any part of it for a business, other than farming, then you do not qualify for the disabled veteran’s exemption. Your cottage up north, in which you spend your summers, is not eligible for the exemption.
There are no asset or income tests used to qualify for the exemption. You are still eligible for the exemption, no matter what your or your spouse’s income is and no matter what the value of your home and other assets may be. And unless you are rated as unemployable, your employment does not affect your eligibility for the exemption.
To get the tax exemption, every year, you have to fill out and file Form 5107 State Tax Commission Affidavit of Disabled Veteran Exemption with your local assessor. You have to file the form after January 1 and no later than prior to the last December board of review. You must accompany the form with proper documentation.
Once you qualify for the exemption, your real estate property taxes will usually be $0.00. You are however, generally still responsible for the payment of special assessments, other than those for police and fire, which are also exempted. So long as the form is timely filed, you get the tax exemption for the entire year, even if filed in December. If you have already paid your summer taxes, you will get those taxes refunded.
Unremarried surviving spouse of a deceased disabled veteran.
If your deceased spouse was a disabled veteran as defined by the Act, you may still be eligible for the exemption, so long as you have not remarried. The exemption is available to you even if your deceased spouse never applied for a tax exemption, but would have been eligible had he or she applied for it.
To qualify, you must have been living with the disabled veteran at the time of his or her death and must have never remarried. Once you remarry after the death of the disabled veteran, you are no longer eligible to apply for the tax exemption, even if you subsequently divorce or become widowed again.
In addition, the disabled veteran to whom you were married must have been a Michigan resident at the time of his or her death and must have owned a Michigan homestead at the time of his or her death. Although the Michigan Tax Tribunal has ruled that a surviving spouse cannot qualify for the exemption when the deceased disabled veteran never owned or occupied the subject property as a homestead, the Michigan State Tax Commission does not agree with or support that determination. Since the exemption is personal to the qualified individual, the State Tax Commission is advising assessors and boards of review that they can and should approve exemptions for unremarried surviving spouses that meet all other statutory requirements, regardless of if the disabled veteran ever owned or occupied that subject property as a homestead.
To get the tax exemption as a surviving spouse of a disabled veteran, you have to file annually with the local assessor, just like the veteran would have done.
Low income households.
If your household income is below the federal poverty guidelines, you may be eligible for property tax relief. The federal poverty guidelines are published annually. The guidelines for 2018 for a single person household is $12,060, plus $4,180 for each additional household member. So it would be $20,420 for a household of three in 2018. Each taxing unit can set their own alternative income guidelines, so long as they are no lower than the federal guidelines..
Not only are there income guidelines, there are also asset guidelines which are set by the local taxing authority. Your assets must be below those limits to qualify for the exemption. The asset guidelines vary widely among taxing authorities. Check with your local assessor to determine your taxing unit’s guidelines.
To qualify for the exemption, you have to own your home and use it as your principal residence. Your principal residence means the one place where you have your true, fixed and permanent home to which, whenever absent, you intend to return, and will continue as such until another principal residence is established.
Just like the disabled veteran tax exemption, you have to file for the poverty exemption every year. The local taxing authority provides the forms that you have to fill out. The completed form, together with appropriate documentation of home ownership, income and assets have to be filed with the local taxing authority. The local taxing authority then determines the eligibility and amount of poverty tax exemption for which you are eligible.
You may be hesitant to request a poverty exemption because you have to disclose so much financial information to taxing authorities. But if you are a senior on a fixed income and limited resources, the tax exemption may be one way to be able to keep you in your home.
Published edited September 23, 2018 in The Times Herald newspaper Port Huron, Michigan as: You might not have to pay property taxes