Michigan Disabled Veteran Property Tax Exemption

Section 211.7b exempts real property used and owned as a homestead by a disabled veteran from the collection of taxes under the General Property Tax Act. Not a share of the value and not a credit against the bill: the whole homestead comes off the roll. On a $400,000 house in a township levying 40 mills that is roughly eight thousand dollars a year, and there is no ceiling of any kind. It is the largest single benefit in the Michigan file and, measured in dollars, one of the largest in this catalog. Three routes in, and only the first is the one everybody quotes. A disabled veteran is a Michigan resident who has been determined by VA to be permanently and totally disabled as a result of military service and entitled to veterans' benefits at the 100% rate; or who holds a VA certificate showing receipt of pecuniary assistance for specially adapted housing; or who has been rated by VA as individually unemployable. The second route reaches a veteran who received an SAH grant, which is a different determination from a rating. The third asks only for an unemployability rating and, unlike South Dakota's equivalent, attaches no permanence requirement to it. The Department of Treasury's own landing page for the program still describes it as "a property tax exemption for 100% Disabled Veterans" and cites P.A. 161 of 2013. Neither the specially adapted housing route nor the unemployability route appears in that sentence, and both are in the statute. The veteran definition here is narrower than Michigan's general one. Section 211.7b(4)(c) says an individual who served in the United States Armed Forces, including the reserve components, and was discharged or released under honorable conditions. The state's uniform definition in 35.61 says "other than dishonorable", which is wider. A general discharge under honorable conditions qualifies for this exemption; an other than honorable discharge does not, although it would still make the person a veteran for most other Michigan purposes. Ownership is defined tightly. For the veteran, legal title must be held solely by the veteran or jointly by the veteran and the veteran's spouse. A house in a trust, or co-owned with an adult child, falls outside the definition. Filing. The application goes to the assessing officer for the local assessing unit after January 1 and before December 31 of the calendar year claimed, on a form prescribed by the State Tax Commission. That is an unusually long window and it closes at the end of the tax year rather than in the spring. The application when filed is open to inspection, which is the opposite of the South Dakota rule and means a neighbour can read it. The change that matters most recently. Before 2023 this exemption had to be claimed again every single year. Section 211.7b(2) as amended by 2023 PA 150 provides that an exemption granted as to taxes levied on or after January 1, 2025 remains in effect, without subsequent reapplication, until it is rescinded by the individual or denied by the assessor under section 7c. Guidance written before October 2023 tells veterans to refile annually, and a veteran who believes it will lose the exemption by not refiling. Who pays for it is the sentence that explains everything else. Upon granting the exemption, each local taxing unit shall bear the loss of its portion of the taxes. There is no state reimbursement, so the township, the county, the school district and the library each simply collect less. That is why Michigan assessors scrutinise these claims, why the 2023 legislation paired the no-reapplication rule with a mandatory audit program, and why the proration rules in subsection (3) are as detailed as they are. Proration in the year of purchase or sale. Where the veteran does not own and occupy for the whole tax year, the exemption is prorated by one of three methods: from the closing documents, which the veteran must supply with the application; or by dividing the year's taxes by 365 and multiplying by the days of qualifying ownership; or, on removal, from the date of the conveyance. There is no refund of taxes not levied in the current year that the buyer paid to the seller at closing.