Title
Resolution to Adopt the Board of Review Guidelines for Poverty Exemptions from Property Taxation of Principal Residence Pursuant to MCL 211.7u
Memorandum
Attached for your approval is a resolution to adopt the Board of Review Guidelines for Poverty Exemptions pursuant to MCL 211.7u. Local governing bodies may adopt guidelines that set income levels for poverty exemptions from taxes of principal residences at levels higher than the Federal poverty guidelines published in the prior calendar year in the Federal Register by the United States Department of Health and Human Services; MCL 211.7u and also requires local governing bodies to identify in their guidelines, specific income and asset level limitations of both the applicant and the household (“asset test”).
Approval of the attached Board of Review Guidelines further defines Poverty Exemption, maintains the existing maximum $50,000.00 asset level test, and sets the income limits not to exceed 50% of the area median income (AMI) limits established by the Department of Housing and Urban Development for Washtenaw County as published in the previous year. If Council approves the revision, the Board of Review will implement the changes for the 2027 tax year.
Approval of the Board of Review Guidelines will establish specific reductions in taxable value for residents that qualify for a reduction in taxable value because of poverty. The Board of Review shall grant the exemption in whole or in part as follows:
• A full exemption equal to 100% reduction in taxable value for the tax year in which the exemption is granted if the income of a resident is equal to or less than the federal poverty level.
• A partial exemption of 75%, 50% or 25% reduction in taxable value for the tax year in which the exemption is granted based on the household income of a resident greater than the federal poverty level and less than or equal to the maximum poverty level adopted by council. The level of exemption shall correspond with uniform income thresholds within the adopted range.
Staff
Prepared by: Jerry Markey, Assessor
Reviewed by: Marti Praschan, CFO & Financial Services Area Administrator
Reviewed by: John Reiser, Senior Assistant City Attorney
Approved by: Milton Dohoney, Jr., City Administrator
Body
Whereas, MCL 211.7u allows the principal residences of persons who, in the judgment of the Board of Review, by reason of poverty, are unable to contribute toward the public charges be eligible for exemption in whole or in part from taxation under this act;
Whereas, the Governor signed into law Enrolled Senate Bill 55, Public Act 0191 of 2023 on November 11, 2023 modifying MCL 211.7u;
Whereas, MCL 211.7u(2)(e) set the income guidelines to meet the Federal poverty income standards or alternative guidelines adopted by the governing body of the local assessing unit provided those guidelines are not less than the Federal poverty guidelines published in the prior calendar year in the Federal Register by the United States Department of Health and Human Services;
Whereas, Public Act 0191 of 2023 allows a full exemption equal to 100% reduction in taxable value for the tax year in which the exemption is granted;
Whereas, Public Act 0191 of 2023 allows a partial exemption equal to 75% or 50% or 25% in taxable value for the tax year in which the exemption is granted;
Whereas, Public Act 0191 of 2023 provides if a poverty exemption was not granted in the prior year, and was not denied, the July or December board of review shall grant an exemption, in whole or in part, for the immediately preceding tax year on the principal residence of a person who establishes eligibility in that tax year under the criteria in the Board of Review Guidelines for Poverty Exemption; and
Whereas, The City Council last approved the series of guidelines in 2026 developed by the Ann Arbor City Assessor and Board of Review which conformed to MCL 211.7u;
RESOLVED, That City Council adopt the 2027 Poverty Exemption Guidelines for the Ann Arbor Board of Review to implement, which establishes the poverty income levels not to exceed 50% of the area median income (AMI) limits established by the Department of Housing and Urban Development for Washtenaw County as published in the previous year and adopt the existing asset level test of $50,000.00. These guidelines shall supersede any previously adopted Poverty Exemption Guidelines.