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?

The Michigan Legislature recently 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 now resides in a nursing home or assisted living facility may 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.

Keep these four factors in mind if you have moved to a nursing home or assisted living facility. It might be a good idea to keep your home address on your driver’s license and voter’s registration to demonstrate that you plan to return to your property. Also, if the stay in the nursing home or assisted living facility will be temporary, it may be a good idea to leave the home vacant in order to preserve the homestead exemption and the lower property taxes.

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