MI HB4905

Allows property owners residing in nursing homes, assisted living facilities, or convalescent care to retain the principal residence exemption if they maintain ownership, have not established a new principal residence, maintain the property, and do not lease or use it for business purposes.

Expands exemption eligibility to active duty military personnel stationed in Michigan who maintain their principal residence in the state and satisfy similar conditions regarding ownership, maintenance, and non-commercial use.

Establishes procedures for denying exemptions, including notification requirements, appeal rights to the Michigan tax tribunal within 35 days, and corrected tax billing with interest at 1.25% per month for improperly exempted properties.

Requires annual verification by December 31 that properties claiming conditional exemptions (such as foreclosed properties held by lenders) continue to meet exemption requirements or face denial and retroactive loss of exemption effective December 31 of the prior year.

Specifies interest distribution percentages to local tax collecting units, the Department of Treasury, and counties based on which entity denies the exemption, with counties receiving interest deposited in a restricted fund for exemption administration.