Moving Before Your Downriver Home Sells? Keep Your PRE
What happens to your PRE when you move before the old house sells?
Here’s the good news. You don’t have to give it up right away, as long as you file. Michigan has a fix built for exactly this spot, and it’s called a conditional rescission.
Say you found the next house first. Maybe it’s a bigger place in Brownstown Township, maybe it’s a ranch closer to family. You closed, moved in and claimed the principal residence exemption on the new place. Meanwhile your old Wyandotte or Southgate house is still on the market. The conditional rescission lets you keep the PRE on the old house for up to three years while you claim it on your new Michigan home.
There are four conditions, and the old house has to meet all of them the whole time:
- It’s for sale.
- It’s not occupied.
- It’s not leased.
- It’s not used for any business or commercial purpose.
Keep nobody living there, keep it on the market and file the paperwork on time, and you keep the exemption while you sell. If you’re still deciding which comes first, selling or buying, the sell before buying guide for Wyandotte walks through that bigger call.
How do you file for a conditional rescission?
You file Form 4640 with the assessor for the city or township where the old house sits. If the old house is in Southgate, that’s Southgate’s assessor. If it’s in Brownstown Township, it’s the township’s assessor.
Put these on your calendar:
- First year: file by June 1 to start with the summer tax levy, or by November 1 to start with the winter tax levy.
- Each later year, up to three in all: refile by December 31 of the year before the year you’re verifying.
Every refiling is you telling the assessor the house is still for sale, still unoccupied, still not leased and still not used for business. Exactly which December 31 your first refile falls on depends on the tax year you start with, so confirm that date with the assessor when you hand in the first form.
Two more details matter. If you had more than one exemption, each one needs its own Form 4640. And if the old house only had a partial exemption, you keep the partial amount, not a full one. You can get the form at michigan.gov/PRE or from your local assessor.
Fill out the form like the assessor will read it
The form asks plain questions. Is the property for sale? When was it listed? Does anyone live there? Is it leased? Is it used for business? It also asks when you bought your current principal residence and when you moved in. Have those dates ready from your closing paperwork before you sit down with it.
Pull this short list together first:
- The parcel number and address of the old house, off your latest tax bill or assessment notice. The assessor’s address is often on those too.
- The date you closed on the new house and the date you moved in.
- The date the old house went on the market, from your listing agreement or the listing itself.
- A copy of every Form 4640 you file, with the date you handed it in or mailed it.
That last one matters. If a question ever comes up about whether you filed on time, your own copy with a date on it is the easiest thing to point to. And if anything changes after you file, like a relative asking to stay there or an offer from someone who wants to rent first, call the assessor before you say yes.
What can cost you the exemption?
Three things, mostly.
Missing a deadline. If you don’t refile on time, the assessor denies the PRE on the old house. Treat December 31 like a closing date.
Letting someone live there. The house has to be not occupied, and the form asks point blank whether you or anyone else lives there. If a relative wants to stay there while it’s listed, ask the assessor first.
Leasing it out. This is the big one if the house sits longer than you planned and you start thinking about a tenant. A leased house doesn’t qualify, and once the conditions aren’t met, the assessor denies the PRE on that property. Talk to the assessor before you put a renter in there.
One more condition matters if you’re leaving the state. Your new principal residence has to be in Michigan, with the PRE claimed there. If you’re moving out of state, the conditional rescission isn’t built for you.
How does this change your selling plan?
It buys you time. Carrying two houses is expensive, and the conditional rescission lets the old house keep its exemption while you sell, so the timing of your sale doesn’t have to be driven by the exemption.
A few tactical moves:
- File the day you’re eligible. Don’t wait until May 31 or October 31. Get it to the assessor with a copy for your records.
- Set the December reminder now. Put a December 1 reminder on your phone for every year the house might still be on the market.
- Ask the assessor what counts as for sale. The house has to be for sale the whole time, and the assessor decides whether it qualifies. Ask what they look at before you set your listing plan. Pricing to sell also keeps you from paying two sets of bills longer than you have to, and the Riverview seller net sheet guide shows how to run your numbers.
- Write the filing dates into your listing plan. Your agent is already tracking showings, price changes and offer deadlines. Add your Form 4640 dates to the same calendar so the tax side doesn’t get lost in a busy fall.
- Keep it unoccupied and keep it shown. No one living there, and the house ready for showings. Keep the utilities on so buyers and inspectors can see everything work.
What if it still hasn’t sold after three years?
The conditional rescission tops out at three years. If you’re coming up on that and the house is still sitting, the bigger question is pricing and strategy. Look hard at the price, the condition and what buyers are saying after showings. Then talk with the assessor about what happens to the exemption on the old house once the three years run out, so the next tax bill doesn’t surprise you.
If you’re also the buyer on your next move, the Trenton property tax guide for buyers covers how to read a home’s PRE status and tax numbers before you set your offer limit.
Who should you call before you file?
Start with the assessor for the city or township where the old house sits. They approve or deny the form, so they’re the right person to ask whether your situation fits before you file.
Good questions for that call:
- Does my situation fit the conditions, given who’s been in the house and how it’s listed?
- Which deadline applies to my first filing, June 1 or November 1, and when is my first refile due?
- Where do I send the form, and how do I confirm you received it?
- When will I hear whether it’s approved?
Keep notes from that call: who you talked to, the date and what they told you about your deadlines. Put them in the same folder as your copies of the form.
Your tax pro is the second call, especially if you’re weighing a lease, moving out of state or holding the house longer than you planned. Those are the situations where the rules turn on facts specific to you.
And keep your agent in the loop on dates. If you’re relying on the conditional rescission, your listing timeline and your filing dates should line up, so nothing lapses while you’re busy moving.
Frequently asked questions
Where do I get Form 4640?
From your local assessor, or online at michigan.gov/PRE. It goes back to the assessor for the city or township where the old house sits.
Can my adult kid live in the old house while it's for sale?
Not if you want to keep the conditional rescission. The old house has to be not occupied, and the form asks whether you or anyone else lives there.
What if I decide to rent the house instead of selling it?
Then it no longer qualifies. The house has to be not leased, so talk with the assessor about what happens to the exemption before you sign a lease.
My new home is out of state. Does this still work?
The conditional rescission is built for someone who has a new principal residence in Michigan and claims the PRE there. If you're moving out of state, talk with the assessor about your options before you file anything.
Sources
Ready to talk strategy? Call David Goad at 313-319-7688.
If you want to dig deeper into the local market, check out the Downriver MI Real Estate Guide. And if you want to get a better feel for who I am and how I work, here's the About David Goad — Downriver Realtor page. If you're comparing agents and trying to figure out who really knows this market, this page on the best Realtor in Downriver MI gives you more context too.
