Most people who own a home use it as their personal residence. This entitles them to a “homestead exemption” that results in a lower property tax bill.

But what happens if a homeowner needs to move into a nursing home or assisted living facility in order to get care? Will he lose his “homestead exemption” if he has moved out of his primary residence?

In 2012, the Michigan Legislature amended the law to make it clear that a resident in a nursing home or assisted living facility will NOT lose his homestead exemption if he has moved out of his principal residence. As of October 9, 2012, a homeowner who resided in a nursing home or assisted living facility could retain the homestead exemption if he “manifests an intent to return to the property.” His intent to return can be proven by satisfying ALL of the following conditions:

  • The owner continues to own the property while residing in the nursing home or assisted living facility;
  • The owner has NOT established a new principal residence;
  • The owner maintains or provides for the maintenance of the property while residing in the nursing home or assisted living facility;
  • The property is not occupied, IS NOT FOR SALE, is not leased and is not used for any business or commercial purpose.

On March 20, 2014, the Michigan Legislature further amended this law to allow the house to be for sale and still keep the homestead exemption. Even better, the law is retroactive and applies to all taxes levied after December 31, 2012.

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