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 pa rk 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 cred it 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 ci ty by the owner. In the com putation 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 manageme nt agent for the percentage that applies
to their homestead.
(6) This rule is effective for the tax year starting January 1, 1978.