Homeowner Tax Tips Before the New Year: What Michigan Residents Should Know

As the year wraps up, it’s not just about holiday shopping and cozy nights by the fire — it’s also the perfect time to review your homeowner tax benefits before December 31.

Whether you’ve recently bought a home, owned one for years, or are planning to sell in 2026, a few smart moves now can help you save money and avoid surprises when tax season rolls around. Here’s what Michigan homeowners should keep in mind before the new year.

1. Don’t Miss the Michigan Homestead Property Tax Credit

If your home is your primary residence, you may qualify for the Michigan Homestead Property Tax Credit, which provides relief for eligible homeowners based on income and property taxes paid.

Many residents overlook this credit, but it can mean hundreds of dollars back in your pocket. You can check eligibility and file for it when you submit your Michigan state return (Form MI-1040CR).

Pro tip: Even if you don’t qualify every year, it’s worth checking annually — changes in income or property taxes might make you newly eligible.

2. Make Sure You’ve Filed Your Principal Residence Exemption (PRE)

If you recently bought a home, make sure you’ve filed your Principal Residence Exemption (PRE) with your local township or city office.

This exemption can reduce your property taxes by removing the school operating tax — potentially saving you up to 18 mills. Once it’s filed and approved, you’ll continue receiving the benefit each year as long as the home remains your primary residence.

3. Track Deductible Homeownership Expenses

Certain expenses related to homeownership may be tax-deductible at the federal level. Here are a few to review with your tax professional:

Mortgage interest (check your Form 1098 from your lender)

Property taxes paid

Points paid on your mortgage

Energy-efficient home improvements (may qualify for tax credits)

Keep receipts and records handy — organizing them now makes tax filing smoother and ensures you don’t miss potential deductions.

4. Consider Energy-Efficient Upgrades Before December 31

Did you know certain energy-efficient home improvements may qualify for federal tax credits?

If you’ve been thinking about upgrading your insulation, windows, or HVAC system, doing it before year-end could help you claim credits under the Energy Efficient Home Improvement Credit.

These upgrades not only reduce your utility bills during Michigan’s coldest months but may also improve your resale value in 2026.

5. Selling Soon? Track Your Capital Gains and Improvements

If you sold your home this year (or plan to next year), knowing your capital gains rules matters.

Generally, if you’ve lived in your home for at least two of the past five years, you can exclude up to $250,000 (or $500,000 for married couples) in profit from taxes.

Keep detailed records of home improvements — like roofing, kitchen remodels, or new siding — since these costs can reduce your taxable gain when you sell.

6. Review and Pay Winter Property Taxes Early

Most Michigan property taxes are due twice a year, and your winter bill typically arrives in December.

Paying before the end of the year can sometimes help if you plan to itemize deductions, plus it keeps you from facing late fees or interest in January.

Plan Now, Save Later

Small steps now can lead to big savings in the spring. By organizing your records, double-checking exemptions, and planning with your accountant, you can make sure you’re taking full advantage of Michigan’s homeowner benefits.

Let’s Make Your Home Work for You This New Year

Owning a home isn’t just about comfort — it’s a major financial asset.

If you’d like to know how your home’s value and equity can position you for financial success in 2026, we’d love to help.

Get your free personalized Market Report for your Southern Michigan neighborhood — find out what your home is worth and how to use your equity smartly next year.
Register on our website to get started today — before the new year begins!

Here’s to smart planning, cozy homes, and a prosperous 2026.


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Written by LIVgreat Real Estate, your trusted Washtenaw County real estate experts.
Email: hello@livgreatrealestate.com
Website: https://livgreatrealestate.com



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