Section R. 206.28 - Homestead property tax credit; renterRule 28.
(1) A person renting a homestead that is subject to a property tax is entitled to a homestead property tax credit similar to the credit allowed the homeowner.(2) The renter, in his or her computation of the credit, shall use 17% of gross rent for taxes on his or her homestead.(3) Gross rent is the contracted rental amount the renter or lessee pays to the landlord. If the department has reason to believe that the amount charged is excessive, the department may adjust the rent to fair market value for purposes of computing the credit.(4) Persons living in a mobile home park may claim credit on the $3.00 per month specific tax and 17% of the remaining charges as rent. Example 1. Monthly charges for the lot are $65.00, including the $3.00 per month specific tax. Rent paid for the entire year, $62.00 x 12 = $744.00.
Property tax in rent, 17% x 744.00.......................... | $126.48 |
Specific tax at $3.00 per month............................... | 36.00 |
| __________ |
Homestead property taxes for credit computation..... | $162.48 |
(5) A person renting a homestead that is subject to a service fee as provided by section 15a of 1966 PA 346, MCL 125.1415a, in lieu of an ad valorem property tax, shall base his or her property tax credit on the service fee included in the rent he or she pays. The person does not use 17% of rent paid. For example, John Doe rents a home for $160.00 per month or $1,920.00 per year. The home is tax exempt but a service fee of 7% of rent is paid to the city by the owner. In the computation of the credit, John Doe uses 7% of $1,920.00 or $134.40 for property taxes. The service fees can vary from 1% to 10% of the rent paid depending on the city and type of housing. Therefore, occupants of service fee housing should ask their management agent for the percentage that applies to their homestead.(6) This rule is effective for the tax year starting January 1, 1978.Mich. Admin. Code R. 206.28
1979 AC; 2016 MR 8, Eff. 5/3/2016