Disabled Veteran Property Tax Exemption in Michigan (2026)

Last reviewed August 26, 2026. Every figure, form and deadline on this page is re-checked against the state’s own government sources once a quarter, and the date above is updated when we do it.

The disabled veteran property tax exemption in Michigan removes 100 percent of the property tax on your home once you qualify. Michigan calls it the Disabled Veterans Exemption under MCL 211.7b. There is no partial version and no income test. You file Form 5107 with the assessor of the city or township where your home is located, not with the county and not with the state.

Unlike most states, Michigan does not make you wait until the following tax year if you buy mid-year. The exemption can be prorated for the year of purchase based on your closing documents. I show you how that math works further down, because it changes what a lender can count at closing.

How much is the Michigan exemption worth?

Michigan’s version is simpler than most states because there is only one tier: a full exemption from property tax on the home you own and occupy as your homestead. There is no $X-of-value cap to index for inflation, no separate lower amount for a lower disability rating, and no income test. If you qualify, your city or township removes the entire tax bill on that property, both the summer and winter levies.

Who you are	What is exempt
Qualifying disabled veteran (100% P&T rating, specially adapted housing certificate, or individual unemployability rating), or unremarried surviving spouse	100% of property tax on the homestead
Veteran rated below 100% and not individually unemployable	Not eligible under this statute (may qualify for the ordinary Principal Residence Exemption or a poverty exemption on separate grounds)

There is no scaled benefit for a 70 percent or 90 percent rating the way Texas or Maryland offer. In Michigan you either meet one of the three 100 percent-level tests or you do not get this exemption.

Because this removes the whole bill rather than a slice of value, what it is worth to you in dollars is simply your current property tax bill. A Michigan home taxed at $4,500 a year keeps the full $4,500 in your pocket, not a few hundred dollars like a capped exemption would return.

Who qualifies in Michigan?

To claim the exemption in Michigan you must meet all of these:

• Served in the U.S. Armed Forces, including the reserve components, and were discharged or released under honorable conditions. An other-than-honorable or dishonorable discharge does not qualify.
• Are a Michigan resident.
• Own and occupy the home as your homestead.
• Meet one of these three VA determinations:

Test	What it means
(i) Total and permanent	The VA has determined you are permanently and totally disabled as a result of military service and entitled to veterans’ benefits at the 100 percent rate.
(ii) Specially adapted housing	You have a VA certificate showing you are receiving or have received pecuniary assistance for specially adapted housing (the SAH or SHA grant programs).
(iii) Individual unemployability	The VA has rated you individually unemployable. This requires one service-connected disability rated at 60 percent or more, or two or more disabilities with one rated at 40 percent or more and a combined rating of 70 percent or more, plus a finding that you cannot hold substantially gainful employment because of it.

The statute does not require you to already be receiving the compensation, only that the VA has made the determination. A letter from your County Department of Veterans Affairs saying you qualify is not enough. The assessor needs the actual VA award letter or certificate.

Surviving spouses

An unremarried surviving spouse of a veteran who was eligible immediately before death keeps the exemption, and it follows the spouse to a new home bought after the veteran’s death. Remarriage ends it.

You do not reapply every year anymore

Before 2025, Michigan required an annual affidavit. Under MCL 211.7c, as of January 1, 2025, an approved exemption stays in effect without refiling until the owner rescinds it (Form 6054, within 45 days of no longer qualifying or no longer using the home as a homestead) or the assessor revokes it (Form 6055, with appeal rights to the Michigan Tax Tribunal within 35 days).

Can the exemption be used before closing?

In Michigan, often yes, and this is unusual. Most states tie the exemption to ownership on a fixed date, which pushes it to the year after you buy. Michigan instead lets the exemption be prorated for the calendar year you close, using the actual proration in your purchase paperwork.

The State Tax Commission’s April 2026 guidance on Form 5107 spells out the math. If your closing prorates taxes on a straight calendar-year basis and you close June 1, the seller pays you their 5/12 share and you get the exemption for the remaining 7/12 of that year’s bill. If your closing prorates taxes as if paid in advance, the outcome is different: you take on the full remaining-year tax bill at closing but the exemption then covers 100 percent of the current year, with no refund for what the seller already paid toward the prior year. Bring your closing statement or other purchase documents when you file Form 5107. If you do not, the local treasurer instead prorates the exemption strictly by the number of days you owned and occupied the home that year, even if your purchase contract had you paying the full year’s taxes.

Four states put a pre-purchase determination in the statute. Michigan is not one of them

State rule. Four states let a qualifying veteran get something in writing from the taxing authority before they own the home:

• Virginia: file the normal exemption paperwork plus documentation of the purchase agreement and the commissioner of the revenue must process it and send an approval or denial letter, with the exemption amount, within 20 business days. Va. Code § 58.1-3219.6(B). The exemption itself takes effect only after you become the owner.
• Maryland: you may apply for a specific dwelling you intend to purchase, and the Department of Assessments and Taxation must send a preliminary approval or denial, with the amount, within 15 business days. Md. Code, Tax-Property § 7-208(d)(5). No second application is needed once you own it.
• Utah: a qualifying disabled veteran claimant may apply before owning the residence with a real estate purchase contract, filed in the county where the home sits, and the county must send a receipt with preliminary approval or denial and the calculated amount within 15 business days. Utah Code § 59-2a-502(5).
• Alabama: for closings on or after October 1, 2026, the tax assessing official issues a tentative certificate of permanent and total disability before purchase, within 20 days, and the statute says a settlement agent or loan closing officer may not consider the homestead ad valorem taxes when calculating debt-to-income once you hand over that certificate. Ala. Code § 40-9-21.3.

One correction worth having, because it gets repeated a lot: outside of Alabama these laws bind the county or the state tax office, not your lender. They force the taxing authority to answer you in writing before closing. They do not order a lender to waive or exclude the tax. Alabama is the only one of the four that reaches into the loan file itself. North Carolina has a bill that would add a prequalification process, House Bill 94, which passed the House 112 to 0 in May 2025 and has sat in Senate Rules since. It is not law, so do not plan around it.

In Michigan it is a lender decision, so shop it

Lender overlay and market practice. There is no Michigan statute telling the taxing authority to pre-approve you before you own the home, so whether this benefit helps you qualify comes down to lender policy. Here is what that looks like in practice, from lender guidance we collected directly in August 2026:

• Some lenders will use the reduced tax figure before closing, and some will not. One wholesale lender told us plainly it will consider a veteran real estate tax exemption and a reduced property tax number in the qualifying payment, as long as underwriting gets the local exemption rules and proof you meet them. If the documentation is short, underwriting uses the full tax amount instead. Another wholesaler checks it state by state and county by county on every single closing. If your lender says no, that is not the final answer on the benefit. It is that lender’s answer. Ask another one.
• Every lender will require proof of eligibility if the lower tax is doing work in your file. If the reduced tax is what lowers your debt ratio or raises your residual income, expect to document it: your VA rating decision or award letter showing the qualifying disability, the taxing authority’s own published exemption rules, and usually the completed exemption application. One lender’s VA guide requires proof of 100 percent disability from VA plus a copy of the completed county application for property tax exemption, and where the application has to be notarized it takes an unsigned copy up front and conditions it to be signed at closing.

Lender overlays apply everywhere. State permission is not lender permission. One large investor allows the anticipated reduced tax for qualifying only for primary residences in California, Florida, Maryland, Texas, Utah and Virginia, and only with proof the veteran applied to the taxing authority before the note date. Michigan is not on that list.

Practically, ask your loan officer two questions before you write an offer: will you use a reduced tax figure to qualify me, and will you waive the tax escrow. Different lenders give different answers on the same file, and that is normal, not a mistake.

What we can do instead: waive the escrow

If the exemption cannot be counted yet, the fallback is to not escrow the taxes at all, so your monthly housing expense is not carrying twelve months of a tax bill that is about to shrink. VA does not require escrows, so this is a lender and investor decision, and many will allow it on a strong file. There are lenders that will waive the tax escrow on a VA loan even when the property taxes have not been waived yet, so this is a real option and not a rare favor. Some will waive it with no restrictions at all, others want the eligibility proof and the correct paperwork in the file first. Waiving escrow does not require the taxing authority to approve anything, which is why it is usually the easier ask of the two. Understand the tradeoff: with no escrow account, you pay the taxing authority directly and you are on your own for those tax bills until the exemption is actually approved, and approval can take a while. Budget for it and pay the bill on time; a delinquent tax bill on a home you just bought is an expensive way to save a few dollars of monthly payment.

One more VA rule to know, because it runs the other way. On estimating taxes, Chapter 4 says “If taxes are expected to increase, use the increased amount.” There is no matching VA instruction that lets an underwriter write down your taxes, which is why the reduction is always a lender option and never a VA entitlement. The Chapter 4 text is here if you want to read it.

Plan for the gap between closing and approval

These applications take a while to process, and the taxing authority’s calendar does not wait for your loan. A tax bill can come due between your closing date and the day your exemption is approved, and you are the owner, so that bill is yours. That can include taxes attributable to the period the prior owner held the home. One lender’s VA guide makes it explicit and requires a signed letter of explanation from the veteran borrower stating they are solely responsible for the property taxes owed for the prior owner. Keep the money set aside and do not assume the first bill will be reduced, especially if you waived escrow and Michigan is billing you directly.

How to apply in Michigan, step by step

1. Get Form 5107, the State Tax Commission Affidavit for Disabled Veterans Exemption, from the Michigan Department of Treasury (PDF download) or your local assessor’s office.
2. Attach your VA documentation. A copy of the actual VA award letter or certificate showing which of the three tests you meet: the 100 percent total and permanent rating letter, the specially adapted housing certificate, or the individual unemployability determination. A county veterans affairs letter saying you qualify is not accepted on its own.
3. If you just bought the home, attach your closing statement or other purchase documents so the treasurer can prorate the exemption using the terms of your sale instead of a flat days-owned calculation.
4. File it with the assessor of the city or township where the home is located, not with the county, the Department of Treasury, or the State Tax Commission. Michigan property tax assessing is a local, city or township function even though state law sets the rules. Use the State Tax Commission’s Current Assessor of Record Report (PDF download) to find who assesses your specific city or township, or call your local unit’s clerk if the report does not have a phone number listed for your jurisdiction.
5. File any time after January 1 and before December 31 of the year you are claiming the exemption for.
6. You do not have to refile every year once approved, effective for exemptions in place starting January 1, 2025. File Form 6054 to rescind it if you no longer qualify or move. If the assessor denies or revokes it, you get a written Form 6055 with appeal rights to the Michigan Tax Tribunal within 35 days.

The March, July and December Boards of Review cannot grant this exemption for the current year, only the local assessor can approve a new claim. The July and December Boards of Review can correct a qualified error, such as a processing mistake on a timely filed affidavit or a delay in the VA’s determination, for the current year and the immediately preceding tax year.

What happens with prior years and errors

Michigan does not run this as a claim-a-refund-later program the way some states do. Instead, the proration rules at the time you file take care of the current purchase year, and going forward the exemption applies to both the summer and winter levies for as long as you remain qualified.

If an assessor made a processing error on a timely filed Form 5107, or the VA was slow to issue its determination, the July or December Board of Review can fix it as a “qualified error” under MCL 211.53b for the current year and the immediately preceding tax year. That is the main path to getting money back after the fact in Michigan, and it depends on there being an error, not simply a late filing on your part.

On the other side, if you are found not to have qualified, the assessor can deny the exemption for the current year and the three immediately preceding years, and you become liable for the back taxes plus penalty and interest under MCL 211.7c(d). Keep your VA documentation current and tell your assessor promptly if your rating or occupancy status changes.

Other Michigan programs for disabled veterans

The property tax exemption is the biggest one for homeowners, but Michigan runs several other veteran programs. All are state programs unless noted otherwise.

• Michigan Veterans Trust Fund (state). Emergency grants for veterans facing a temporary financial hardship, covering things like utility bills, home repairs and mortgage assistance. Since December 2021 it also covers peacetime-era veterans 65 and older with at least 180 days of service under the 65+ Peacetime Program. Apply through your county’s MVTF committee. Michigan Veterans Affairs Agency, Michigan Veterans Trust Fund.
• Property Tax Deferment (state). A separate program from the disabled veteran exemption. Taxpayers who meet certain criteria can defer summer property taxes until February 14 rather than paying in the summer. Michigan Department of Treasury, Property Tax Deferment.
• Principal Residence Exemption while on active duty (state). Active-duty service members can retain their Principal Residence Exemption on a Michigan home while deployed, even if it is not occupied as a homestead during the deployment. Ask your local assessor how to document it.
• Veteran service organization grants (state). The Department of Military and Veterans Affairs runs a separate grant program for veteran service organizations, not individual homeowners, but those organizations often help veterans navigate the programs above. DMVA Grants page.
• Adapting a home for a service-connected disability (federal). The VA’s Specially Adapted Housing and Special Home Adaptation grants pay to build or modify a home for certain service-connected disabilities, and receiving one of them is also one of the three tests that qualifies you for Michigan’s property tax exemption above.

Michigan disabled veteran property tax FAQs

How much is Michigan’s disabled veteran property tax exemption?

It is a full exemption. Michigan does not shield part of your home’s value like Ohio does, it removes 100 percent of the property tax on your homestead once you qualify. There is no income limit and no cap on the home’s value.

Do I need a 100 percent VA rating to qualify in Michigan?

You need to meet one of three tests: a permanent and total disability rating entitling you to veterans’ benefits at the 100 percent rate, a VA certificate for specially adapted housing assistance, or a VA individual unemployability rating. Michigan has no partial tier for lower combined ratings under this statute.

Can I get the exemption the same year I buy a home in Michigan?

Yes, and this is where Michigan differs from most states. If you close mid-year, the local treasurer prorates the exemption for that calendar year using your closing documents, or by counting the days you owned and occupied the home if you do not provide them.

Do I have to reapply for the exemption every year?

No, not since January 1, 2025. Once the assessor grants it, the exemption stays in place until you rescind it or the assessor revokes it. Before that date Michigan required annual reapplication.

What form do I file and where does it go?

Form 5107, the State Tax Commission Affidavit for Disabled Veterans Exemption. File it with the assessor of the city or township where the home sits, never with the Department of Treasury or the State Tax Commission directly.

Can a surviving spouse keep the Michigan exemption?

Yes, as long as the spouse does not remarry. The exemption carries over even to a different homestead the surviving spouse buys after the veteran’s death.

Is there a deadline to file Form 5107?

File any time after January 1 and before December 31 of the year you want the exemption for. There is no single fixed date the way Ohio has December 31 as a hard cutoff, but you cannot file before the calendar year starts or after it ends.

Where to go next

• Disabled Veteran Property Tax Exemption Guide, every state’s exemption, form and deadline in one directory
• The complete guide to VA home loans
• Property tax discounts for veterans on VA disability, the national overview
• Bad credit VA loans in Michigan
• Funding Fee Waivers and Refunds Guide, the fee is waived outright at a 10 percent rating or higher, and can be refunded if you already paid it
• Michigan Department of Treasury, Disabled Veterans Exemption page, bulletins, FAQ and forms
• MCL 211.7b, the statute that creates the exemption, and MCL 211.7c, which covers standing, rescission and revocation
• Current Assessor of Record Report (PDF download), the State Tax Commission’s statewide list of the assessor for every Michigan city and township