Mich. Admin. Code R. 206.28 - Homestead property tax credit; renter
Rule 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.
Notes
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