Most people are aware that under Proposal A, the property taxes on your principal residence are discounted. In order to obtain that discount, it is necessary to file a Principal Residence Exemption Affidavit. By signing the affidavit, you are swearing to the following under oath and penalty of perjury:
- You own and occupy the property as your principal residence
- You have "not claimed a substantially similar exemption/deduction/credit on property in another state..."
A property owner may claim only one piece of property as his principal residence. The Michigan Legislature recently amended the law to create stronger penalties for those who try to claim two or more homestead exemptions.
The law now provides that a person who violates the law with the intent to wrongfully obtain an exemption is guilty of a misdemeanor punishable by:
- Imprisonment of not more than 1 year and
- A fine of not more than $5,000.00 or public service of not more than 1,500 hours, or both.
The same penalties can be imposed for knowingly swearing to an affidavit that contains a false statement with an intent to defraud the state or a local municipality.
There are some exceptions to the exemption rules, such as those for a married couple who files separate income tax returns, or active duty military personnel. Be sure you know those rules before you sign under oath on the Principal Residence Exemption Affidavit.