Mich. Admin. Code R 206.25 — "Homestead" defined

Rule 25. (1) "Homestead" means a dwelling, or a unit in a multiple unit dwelling,
which is subject to property tax or a service charge in lieu of taxes pursuant to section
15a of Act No. 346 of the Public Acts of 1968, and is occupied as a home by the
owner or renter. Real pr operty classified as agricultural la nd for property tax purposes
is part of a person's homestead under any of the following conditions:
(a) If the gross receipts from th e taxpayer's agricultural or horticultural
operations are greater than his household inco me, all taxes on farmland may be claimed
for credit.
(b) If gross receipts from the taxpayer's agricultural or horticultural operations are
less than his household income, the credit for property taxes is limited to the property
taxes on land that he has lived on for 10 years or more and which is adjacent or
contiguous to his home.
(c) If the taxpayer has not lived on the land for 10 years and the gross receipts
from agricultural or horticult ural operations do not exceed the taxpayer's household
income, only the taxes on the home and 5 acres of land may be claimed for credit.
(2) The taxes on a homestead, which is an integral part of a larger unit of
assessment, shall be the proportion of the to tal property tax that the value of the
homestead is to the total value of the assessed property.
(a) Example 1. The taxpayer is an insurance agent and is using the first floor of his
2-story house as a business office. He and his wife live on the second floor. Assuming
the value of the real property used for business is equal to the value of the real
property used as a home, the taxpaye r may claim for credit one-half of the property
taxes.
(b) Example 2. The taxpayer has converted the second floor of his home to an
apartment which he rents for $175.00 per month. To determine the property taxes
applicable to the apartment, the annual rent of $2,100.00 (12 x $175.00 = $2,100.00)
is multiplied by 17%. This amounts to $357.00 which is subtracted from the total
property taxes assessed to arrive at the homestead propert y tax the taxpayer may
claim for credit. This example is used when the ho mestead is a part of a larger unit of
assessment and that portion of the assessed pr operty not used as a homestead by
the taxpayer is rented or leased to another person who occupies it as his home.
(3) A mobile home or trailer coach in a trailer park is a homestead. See R 206.28 for
the property taxes that may be claimed for credit by persons residing in a mobile
home in a trailer park.

(4) A nursing home or foster care home or home for the aged is the homestead
of a permanent resident. A hom estead maintained elsewhere by the spouse is
considered a part of the same homestead.
(5) A single person who is a permanent reside nt of a nursing home, foster care
home, or home for the aged and also owns the house he formerly occupied may claim
for credit either the taxes on the house or hi s share of the taxes paid by a nursing home,
foster care home, or home for the aged, but not both.
(6) See R 206.28 for the property taxes that may be claimed for credit by a person
residing in a nursing home, foster care home, or home for the aged.