Michigan Property Tax Exemptions 2026: Homestead, Senior, Veteran & Disability

Michigan (MI) homeowners have several ways to legally reduce their property tax bill — homestead reductions, senior credits, veteran exemptions, and disability programs. This page lists every Michigan property tax exemption available in 2026, who qualifies, dollar amounts, and how to apply.

All Michigan property tax exemptions at a glance

Exemption	Who qualifies	Benefit	Typical savings
Homestead (general)	Owner-occupied primary residence	~$120,000 value reduction	$1,541/yr est.
Senior / Age 65+	Owner-occupied; age 65+; often income-capped	Additional reduction or freeze	$200 – $2,000/yr
Disabled veteran	Service-connected disability rating	Up to 100% exemption in many states	$1,000 – full bill
Disability (non-veteran)	Permanent total disability	Reduction + sometimes freeze	$200 – $1,500/yr
Surviving spouse	Of veteran, first responder, or senior	Continuation of decedent's exemption	Same as deceased's benefit
Agricultural / farm	Active agricultural use	Use-value assessment instead of market	30% – 80% lower bill

Estimated savings use Michigan's effective property tax rate of 1.28% on the median home value of $217,600. Your actual savings depend on your county assessor's millage and how exemptions are applied to assessed (vs. market) value.

Proposal A: the 2.7% Cap for 2026

Article IX, Section 3 of the Michigan Constitution (as amended by Proposal A in 1994) caps year-over-year growth in taxable value at the lesser of:

• The Consumer Price Index (CPI) for the prior year, or
• 5 percent

The Michigan State Tax Commission publishes the official multiplier each year. For tax year 2026, the multiplier is 1.027, meaning Taxable Value can rise no more than 2.7 percent from tax year 2025.

Recent Proposal A caps (for context on how fast TV can rise):

Tax Year	Inflation Multiplier	Cap Applied
2022	1.033	3.3%
2023	1.050	5.0% (CPI hit 7.9%, 5% cap kicked in)
2024	1.050	5.0% (capped again)
2025	1.031	3.1%
2026	1.027	2.7%

Even with the cap, the cumulative effect of 5 percent caps in 2023 and 2024 meant many Michigan homeowners saw compounded 10 percent Taxable Value growth over two years — a meaningful bill increase absent a PRE or exemption.

Principal Residence Exemption (PRE) — the 18-Mill Save

Michigan's PRE (formerly called the Homestead Exemption) exempts a principal residence from 18 mills of local school operating tax. On a $200,000 home with 50 percent SEV, that is an annual savings of approximately $1,800 — one of the largest single-line-item exemptions available in any U.S. state.

How to claim

File form L-4013 (Principal Residence Exemption Affidavit) with your local assessor. Deadline: June 1 for the exemption to apply to the July summer tax bill, or November 1 for the December winter tax bill. File once — the PRE continues automatically as long as the property is your principal residence.

Who qualifies

• Michigan residents who own and occupy the property as their principal residence on June 1 of the tax year
• The property must be a single-family residence, condominium, mobile home, or certain multi-family dwellings where the owner occupies one unit
• Only one PRE per household statewide — file a rescind (L-4080) on your prior Michigan home when you move

Conditional Rescission

If you are trying to sell your former primary residence and have already established a new PRE on another home, the Conditional Rescission (form L-4640) allows you to keep both PREs for up to three tax years while the old home is actively listed for sale. This prevents a double uncapping penalty.

Homestead Property Tax Credit (State Income Tax Credit)

Separate from the PRE, Michigan offers a Homestead Property Tax Credit on the state income tax return. It is a refundable credit against property tax (or a portion of rent for tenants), calculated as a percentage of the amount by which your property tax exceeds 3.2 percent of total household resources.

2026 eligibility

• Total household resources: $67,300 or less
• Taxable value of your home: $154,400 or less
• Maximum credit: $1,800 for non-senior filers; higher limits for seniors age 65+, the disabled, and veterans

How to claim

File MI-1040CR (standard) or MI-1040CR-2 (for farmers) with your Michigan state income tax return. Many Michigan homeowners eligible for the credit never claim it — free tax assistance sites (VITA, AARP) can help determine eligibility.

Frequently Asked Questions

What is the Proposal A cap for 2026 in Michigan?

The Michigan State Tax Commission set the 2026 Proposal A inflation multiplier at 1.027, meaning Taxable Value can increase no more than 2.7 percent from 2025 unless ownership transferred (which uncaps TV to current SEV). The cap is the lesser of CPI or 5 percent.

How does Michigan's Principal Residence Exemption work?

The PRE exempts your principal residence from 18 mills of local school operating tax. Apply by filing form L-4013 with your local assessor by June 1 (for summer tax) or November 1 (for winter tax). The exemption continues automatically as long as the property is your primary residence. On a $200,000 home, the PRE typically saves about $1,800 per year.

What is Michigan's Homestead Property Tax Credit?

A refundable state income tax credit for property tax paid in excess of 3.2 percent of total household resources. For 2026, eligibility requires total household resources of $67,300 or less and a taxable value of $154,400 or less. Maximum credit: $1,800 for most filers, with higher limits for seniors, disabled, and veterans. Claimed on MI-1040CR with your state income tax return.