How to File the Michigan Principal Residence Exemption (PRE) and Save 18 Mills

Last fall I sat at a kitchen table in Hudsonville with buyers who had just closed on a 1990s colonial, and the first thing I did after handshakes was slide a one-page form across the table.They thought the paperwork was over.It wasn't.That form was the Principal Residence Exemption affidavit, and skipping it would have cost them roughly 18 mills of school operating tax on a home assessed near $407,000 — the Hudsonville median. That's the difference between a homestead tax bill and a non-homestead one, and I have watched more than one West Michigan buyer leave it unfiled for a full year because nobody handed them the form.

So this is the walkthrough I give every client.What the Principal Residence Exemption actually does, how to file Form 2368, the two deadlines that decide which tax levy you escape, what counts as a principal residence under Michigan law, and how to rescind cleanly when you sell.I am a Realtor, not a tax attorney, and your assessor is the final word — but I have filed alongside enough buyers in Kent and Ottawa counties to tell you where people trip.

What the PRE is and the 18 mills it removes

The Principal Residence Exemption exempts an owner's principal residence from the tax levied by a local school district for school operating purposes, up to 18 mills. A mill is one dollar of tax per $1,000 of taxable value.The exemption is authorized under Section 211.7cc of Michigan's General Property Tax Act, Act 206 of 1893.

This traces back to Proposal A in 1994.Proposal A eliminated locally levied school operating taxes on most homestead property, while non-homestead property — second homes, rentals, commercial — kept an 18-mill basic operating tax. That is why two identical houses on the same street can carry different bills: one owner filed the PRE, the other didn't.On a taxable value of roughly $150,000 — common for a home selling near the city's $304,000 median — 18 mills is about $2,700 a year. Not a rounding error.

Where the 2026 market makes this urgent

I'll say once, plainly: the market figures here are estimates from public aggregators as of March 2026 for cities and late 2025 for counties, not MLS-certified numbers.With that caveat, the City of Grand Rapids median sits at $304,000, up about 10% year over year, with homes going pending in 9 days and just 1.2 months of supply. Kent County's median is $335,000 at 13 days on market.

Why does a fast market make the PRE more urgent?Because closings are happening quickly, and the deadline to lock the exemption for the current summer levy is June 1. A May closing in Grandville (median $349,819, 9 days to pending) leaves a narrow window. A June 15 closing in Caledonia (median $429,900) misses the summer levy entirely and only reaches the winter bill. The faster you move into the home, the more it matters that the form moves with you.

Step by step: filing Form 2368

The form is the Principal Residence Exemption (PRE) Affidavit, Form 2368, currently Rev. 07-22 from the Michigan Department of Treasury. Here is how I walk clients through it.

1. Confirm you own and occupy. To qualify, MCL 211.7cc requires that the property be owned by a qualified owner and occupied as that owner's principal residence, with the claim made by filing the affidavit. You don't have to live there every single day, but it has to be your true, fixed, and permanent home — the place you intend to return to when absent.
2. Use one affidavit per parcel. File a separate Form 2368 for each property tax identification number you're claiming.
3. File it with the right office. The affidavit goes to the city or township assessor where the property sits — not the county, not the state.In our footprint that means the City of Grand Rapids assessor, or Georgetown Township for Jenison, or Holland Township, depending on the parcel.
4. Mind the deadline (next section). The date you file decides which tax levy the exemption first hits.
5. Keep your stamped copy. Assessors date-stamp the form.That stamp is your proof of timely filing if anything is ever questioned.

The two deadlines that decide everything: June 1 and November 1

This is the part people get wrong, so read it twice.A valid affidavit filed on or before June 1 gives you the PRE on that year's summer and winter tax levies, and every levy after, as long as it stays your principal residence. A valid affidavit filed from June 2 through November 1 reduces that year's taxes beginning with the winter levy only.

Plain version: file by June 1 and you escape the 18 mills on both bills this year.File after June 1 but by November 1 and you only escape the winter bill — the summer school operating tax still lands.Miss November 1 and you wait until next year.On a home near the Rockford median of $430,000 (24 days on market), the summer half of the 18-mill levy can run well over a thousand dollars, so that early-June cutoff is real money.

What actually qualifies as a principal residence

Michigan defines a principal residence as the one place where an owner has a true, fixed, and permanent home, to which they intend to return whenever absent, and which continues as the principal residence until another one is established. A few things I clarify constantly:

• One principal residence at a time. You cannot hold a full PRE on a Caledonia house and a second one on a Holland lakeshore cottage (Holland median $320,000, 17 days on market). The cottage is non-homestead unless it becomes your one true home.
• Rentals and business use disqualify. Treasury maintains specific disqualifying factors — property that's rented, leased, or used commercially generally doesn't qualify for the exemption on that portion.
• Partial claims exist. If you occupy part of a property as your principal residence and use the rest otherwise, the affidavit lets you claim a percentage rather than the whole parcel.

When you sell or move: Form 2602 and the conditional rescission

The exemption follows the home, but the responsibility to rescind follows you.When you no longer own or occupy a property as your principal residence, you must file the Request to Rescind Principal Residence Exemption, Form 2602, with the assessor where the property sits. The assessor then removes the PRE beginning with the next tax year. In a normal sale, you file Form 2602 on the home you're leaving and Form 2368 on the home you're buying.I keep both in the closing folder.

There's a useful in-between for sellers whose old home hasn't moved yet.The conditional rescission lets you keep the PRE on a former principal residence for up to three years if it is not occupied, is for sale, is not leased, and is not used for any business or commercial purpose. You claim it with Form 4640, filed on or before June 1 or November 1 of the first year, then re-verify annually by December 31. Miss the annual filing and the assessor must deny it.With Allendale sitting at 66 days on market (median $450,000), a slow sale there is exactly the scenario the conditional rescission was built for.

What it costs to get this wrong

Treasury audits PREs every year under Section 8 of MCL 211.7cc to confirm only eligible owners hold the exemption, sometimes sending a PRE Audit Questionnaire, Form 4632. If a PRE is denied, the corrected bill adds back the school operating millage plus interest at 1.25% per month, and those taxes generally cannot be waived or reduced because Michigan law bars compromising a property tax roll. If you receive a denial you disagree with, you may appeal in writing to the Department within 35 days of the denial notice.

What I'd do

If I were buying in our market right now, here's my exact sequence.Sign and date Form 2368 at the closing table, the same day I take title — before the boxes, before anything.If we can close before June 1, I file immediately to capture both levies this year; if we close after, I still file by November 1 to grab the winter bill and stop waiting.On the sell side, I file Form 2602 the day I no longer occupy, and if the old place lingers like an Allendale listing, I evaluate the Form 4640 conditional rescission before the first June 1 or November 1 passes.

I also run the actual numbers before clients ever sign.I can run the homestead-versus-non-homestead numbers on a specific parcel for you — ask me and I'll pull the taxable value and walk the difference. A free CMA request is the other way to sanity-check what a parcel's taxable value implies about market value. If you want the bigger Michigan tax picture, I'd pair this with the PRE buyer guide and the breakdown of PRE versus non-homestead tax bills in Grand Rapids.The PRE is one form.Filed on time, it's one of the cleanest tax wins a Michigan homeowner gets.

FAQ

How much does the Principal Residence Exemption actually save me?
It removes up to 18 mills of local school operating tax from your primary home. On a taxable value around $150,000, that's roughly $2,700 a year.The exact dollars depend on your parcel's taxable value, so message me your address and I'll run the numbers for you.

What's the deadline to file Form 2368?
File on or before June 1 and the exemption applies to that year's summer and winter levies.File between June 2 and November 1 and it applies to the winter levy only. After November 1, you wait until the next tax year.

Do I file the PRE with the county or the state?
Neither.You file Form 2368 with the city or township assessor where the property is located — for example the Grand Rapids assessor, Jenison's Georgetown Township, or Holland Township.File a separate affidavit for each parcel.

What do I do with my old house when I move?
File Form 2602 to rescind the PRE on the home you're leaving once you no longer occupy it. If it's still for sale and sitting empty, look at the Form 4640 conditional rescission, which can hold the exemption for up to three years if you re-file annually by December 31.

Can I have a PRE on two homes?
No.Michigan recognizes one principal residence — your one true, fixed, and permanent home. A second property like a lakeshore cottage stays non-homestead unless it actually becomes your principal residence.

What happens if I forget to file or file wrong?
Treasury audits PREs annually, and a denial adds back the school operating millage plus 1.25% interest per month, which generally can't be waived. If you simply forgot to file, get the affidavit in before the next June 1 or November 1 so you stop missing levies.