A reduction in property tax for residential homestead property based on its market value. Residential homestead and agricultural homestead house, garage, and first acre of land were eligible for the credit. The credit was eliminated and replaced with an exclusion beginning with taxes payable year 2012.
The credit was equal to 0.4 percent of the first $76,000 of taxable market value of the property. The credit could not exceed $304, and this maximum occurred when a property had a taxable market value of $76,000. The credit was reduced by 0.09 percent of taxable market value in excess of $76,000. When a property had a taxable market value of $413,800 or over, the residential homestead market value credit was phased out to zero.
Eligible homesteads receive an exclusion on a portion of the property's value. Qualifying property includes homestead property classified as 1a (residential), 1b (homesteads for individuals who are blind/disabled), and 2a (agricultural homestead house, garage, and first acre).
The value excluded depends on a property's market value. The calculation is:
For homesteads valued at $76,000 or less, the exclusion is 40% of market value (maximum of $30,400).
For homesteads valued between $76,000 and $413,800, the exclusion is $30,400 minus 9% of the value over $76,000.
For homesteads valued at or over $413,800, there is no exclusion.
The 1b classification provides a reduced class rate for homestead property of any person who qualifies as blind or as permanently and totally disabled. The 1b property tax classification provides a reduction in property taxes.
Class 1c homestead (formerly ""Ma & Pa"") resorts are resorts that abut public water or a state trail and include a portion used as a homestead by the owner. This property must contain three or more rental units and must provide either of the following:
recreational activities, such as the rental of ice fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment
marina services, launch services, or guide services