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Michigan Principal Residence Exemption — What Every Farmington Hills Homeowner Must Know Before They Sell
The PRE saves Farmington Hills homeowners thousands every year. Here is how to protect it when you sell.
Thomas Gilliam, Neighbor
If you own a home in Farmington Hills Michigan, this is one of the most important things you can read before you decide to sell. The Michigan Principal Residence Exemption — most people call it the PRE — is the property tax benefit that keeps thousands of dollars in your pocket every single year. And most Farmington Hills homeowners have no idea what happens to it when they move. I have been selling homes in Farmington Hills and across Oakland County Michigan for 24 years. After 700-plus closed transactions I can tell you this topic is consistently undercommunicated — by agents, by attorneys, and by the internet. This guide is my attempt to fix that for our community.
18 Mills Exempted
2.7% 2026 Proposal A Cap
3 Yrs Max Back-Tax Exposure
$7K+ Annual Savings Luxury Home
What the PRE Actually Does for Farmington Hills Homeowners
The PRE exempts your primary residence from 18 mills of local school operating tax. Michigan assesses your home at 50 percent of its market value — that is your State Equalized Value or SEV. The PRE pulls 18 mills out of the tax calculation on that number. On a typical Farmington Hills home with a Taxable Value of $200,000 that is roughly $3,600 saved every year. On a luxury home valued at $800,000 those savings can reach $7,000 or more annually. That is real money — and it compounds every year you own the home.The Uncapping Event — What Most Farmington Hills Sellers Never Tell Their Buyers
Under Proposal A your Taxable Value can only grow by the lesser of 5 percent or inflation each year — 2.7 percent in 2026. So if you bought your Farmington Hills home 12 years ago, your Taxable Value today is probably a fraction of what your home is actually worth on the market. Here is what happens when you sell. The Taxable Value uncaps. It resets to the current SEV — roughly 50 percent of today's market value — in the year after the sale. Your buyer's property taxes could jump 40 to 60 percent over what you have been paying. If they miss the PRE filing deadline on top of that, it gets significantly worse. This is not a surprise I let my buyers walk into. It is one of the first conversations we have on every transaction across Farmington Hills and Oakland County Michigan.⚠️ Farmington Hills Sellers — You Must File Form 4640 When You Move
When you sell your Farmington Hills home and move out you are legally required to rescind your PRE by filing Form 4640 with your local assessor. The Michigan Department of Treasury announced in April 2026 that PRE audits and denials have officially resumed across Michigan. If you do not file, the Treasury can go back up to three years and bill you for the school operating taxes you should have paid — plus interest and penalties. File by June 1 for summer taxes. File by November 1 for winter taxes. Do not wait until after closing.A Real Farmington Hills Example — The Numbers That Matter
You bought your Farmington Hills home 12 years ago for $380,000. Today it is worth $600,000. Your Taxable Value after years of Proposal A caps is around $210,000. With your PRE you are paying roughly $4,500 to $5,500 a year in property taxes. Your buyer's Taxable Value resets to $300,000 after the sale. With a properly filed PRE their annual bill runs $6,500 to $8,000. Without a filed PRE — because they missed the deadline — we are talking $9,000 to $11,000 or more. That gap is why buyers who are not properly educated feel blindsided after closing.🏡 A Note for Farmington Hills Families Thinking About Downsizing
As an SRES Senior Real Estate Specialist I work with Farmington Hills families navigating downsizing and senior relocation transitions every year. Here is something most families do not realize until we sit down together. If your parents have lived in their Farmington Hills home for 25 or 30 years their combined Proposal A and PRE savings might be $8,000 to $12,000 a year compared to what someone buying that home today would pay. That changes the financial math on the decision to sell significantly. I walk through those numbers in detail with every family before any decision is made. Call me at 248-790-5594 anytime.What to Do — Step by Step for Farmington Hills Homeowners
When You Buy — Claim Your PRE File Form 2368 with the City of Farmington Hills Assessor as soon as you move in. Deadline is June 1 for the summer tax levy and November 1 for the winter levy. Miss it and you lose a full year of savings.
When You Sell — Rescind Your PRE File Form 4640 with the City of Farmington Hills Assessor when you move out or close on your sale. Same deadlines apply. Do not skip this step — audit enforcement is active in 2026.
Not Sure About Your Status? Contact the City of Farmington Hills Assessor's office directly or call me at 248-790-5594 and I will point you in the right direction. Do not wait until you are already in the middle of a transaction.
Tom's Honest Take "I have lived and worked in Farmington Hills for 24 years. The PRE is the single most valuable financial benefit most homeowners here have — and the most consistently misunderstood." Sellers move without filing Form 4640 and get a back-tax bill two years later. Buyers get blindsided by a tax increase of 40 to 60 percent that nobody told them was coming. Families add children to deeds without realizing it might trigger an uncapping event worth thousands of dollars. None of that should happen to a Farmington Hills family. The full guide with everything you need to know is on my website. Read it before you make any move.
📖 Read the Complete Guide on Homes2MoveYou.com Filing deadlines, real numbers, uncapping explained, estate planning traps, senior relocation considerations, and everything else Oakland County homeowners need to know. Read the Full Guide →
About the Author Tom Gilliam | REALTOR® | RE/MAX Classic | Farmington Hills Michigan Tom Gilliam is a Luxury Estate Marketing Specialist and the best realtor in Farmington Hills Michigan with 24 years of experience and more than 700 closed transactions across Oakland County. Tom ranks in the Top 1% of Oakland County real estate agents and holds the RE/MAX Hall of Fame and Lifetime Achievement Award. He holds the ABR, SRES, PSA, SFR, and RSPS designations and specializes in luxury homes, waterfront properties, senior relocation, and investment real estate across Farmington Hills, Northville, Novi, Birmingham, Bloomfield Hills, Plymouth, West Bloomfield, White Lake, Wixom, Commerce Township, Ferndale, and Canton Michigan. 📞 248-790-5594 | 🌐 Homes2MoveYou.com | RE/MAX Classic | 29630 Orchard Lake Rd, Farmington Hills MI 48334
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24 years. 700-plus transactions. Luxury expertise you can trust across Farmington Hills and all of Oakland County Michigan. 📞 Call or Text 248-790-5594 🌐 Homes2MoveYou.com Serving Farmington Hills | Northville | Novi | Birmingham | Bloomfield Hills | Plymouth | White Lake | Wixom | Commerce Township | Ferndale | CantonMichigan Principal Residence Exemption — What Every Farmington Hills Homeowner Must Know Before They Sell
Michigan Principal Residence Exemption — What Every Farmington Hills Homeowner Must Know Before They Sell
Michigan Principal Residence Exemption — What Every Farmington Hills Homeowner Must Know Before They Sell
