NEZ - Homestead Feb 2021 Presentation

Neighborhood
Enterprise Zones
- Homestead
Proposed Changes for 2021
What is a NEZ Homestead ?
• Neighborhood Enterprise Zone Homestead (NEZH) is a property
tax abatement program for Residential Property Owners who
occupy their home as their principal residence.
What are the requirements for the program ?
A few facts • Your property must be in one of the NEZ Homestead Districts
regarding throughout the City of Detroit

• You must have purchased the property after 12/31/1996
NEZ- • You must both own and occupy the property as your principal
residence
Homesteads • You must stay current on your property taxes
• You must commit to a minimum of $500 of improvements or
repairs to your property over the course of the first 3 years
• You must have filed a Property Transfer Affidavit (PTA) and
Principal Residence Exemption (PRE) with the City of Detroit,
Office of the Assessor
What is a Neighborhood Enterprise Zone - Homestead (NEZH) abatement and how does it affect my
property?
The NEZH is an abatement for an existing structure (house), purchased by or transferred to an owner after December
31, 1996, which is the primary residence of the owner, is located within a zone created by the legislative body of a
local government unit (in this case, Detroit City Council), and which the owner of the property commits to a
minimum of $500 in repairs or improvements over the first three-year period of the abatement.
The Neighborhood Enterprise Zone Act, PA 147 of 1992, as amended, provides tax exemptions for the development
and rehabilitation of residential housing located within eligible distressed communities. The legislative body (Detroit
City Council) of the local governmental unit (LGU) in these eligible distressed areas can designate areas as NEZs.
Only homes located within these established NEZs are eligible for NEZ certificates. Once a NEZH zone is created
by Detroit City Council, NEZ Homestead applications are filed, reviewed and approved by the local assessor.
This abatement last for 15 years and is transferrable, meaning if the owner sells the property, the new owner can take
advantage of the abatement as long as they meet the qualifications.
1. The Neighborhood Enterprise Zone Act, PA 147 of 1992, as amended, provides tax exemptions for the
owner/occupants of residential housing located within eligible distressed communities. The governing body
(Detroit City Council) of the local governmental unit (LGU) in these eligible distressed areas can designate
areas as NEZHs. Only homes located within these established NEZs are eligible for NEZ certificates.
2. What is the difference between a Neighborhood Enterprise Zone and a Neighborhood Enterprise
“Homestead” Zone? A Neighborhood Enterprise Zone (NEZ) covers new facilities and/or rehabilitated facility
projects. A Neighborhood Enterprise “Homestead” Zone covers only pre-existing residential property, located
within a subdivision platted pursuant to state law before January 1, 1968.
3. Who can apply for a Neighborhood Enterprise Zone (NEZ) Homestead Certificate? Only the
owner/occupant of a principal residence within an NEZH zone may file an application for the tax abatement
4. How is the NEZH Tax Computed? A parcel holding a NEZH Certificate will receive two tax bills, one for the
land and one for the house. The abatement is applied only to the house, while the land is taxed at the regular tax
rate. The NEZH does not prevent the property owner from exercising their rights to seek a reduction of their
property value during the City of Detroit’s Assessor Review. In addition, both the land assessment on the ad
valorem roll and the improvement (house) on the special act roll may be adjusted by the March Board of
Review.
How much is the tax reduction ?
• It is approximately a 15 to 20 percent reduction in your Summer Tax Bill
• The NEZ tax abatement reduces the City of Detroit Operating Millage from 19.9520 to 9.9760 mills and the Wayne County
Operating Millage from 5.6483 to 2.8241 mills. All other millage rates are unaffected by the NEZ Homestead abatement
How long does the abatement last ?
• The abatement certificate is issued for 15 years and will last as long as you own your home
How do I apply for the program ?
• The Office of the Assessor will mail an application package to the qualified homeowners in the newly created zones. The
application will also be placed online on the City of Detroit’s web page.
Is there a deadline to file ?
• The Office of the Assessor accepts applications all year. The plan is for the abatement to be effective for the 2021 tax year
• Any application submitted after October 1 will be processed the following year
What documentation will I need
• A driver’s license or state issued ID with the property address
• The Principal Residence Exemption (PRE) must be on file. If not, you will need to fill out the application
• If no Property Transfer Affidavit (PTA) is on file, you will be required to present a certified deed showing ownership of the
property and pay the PTA fine for not filing the affidavit timely
I’ve heard that current NEZ Homesteads abatements are being extended, is this true ?
• YES !!! If you currently have an NEZ – Homestead Certificate and are nearing the end of your
abatement, you will simply need to sign an affidavit stating that the property continues to be your
principal residence and that you will commit to a minimum of $500 in improvements over a 3-year
period and a one time only new certificate will be issued for your property.
What will happen to tax abatements in NEZH areas which are being eliminated ?
• Yes, it is true that some areas which were established in the 2006/2007 timeframe are being modified
and acreage removed. But any homeowner who has an abatement in one of those areas will keep their
current abatement until it expires. Then they will be “grandfathered” into the one time 15-year
application renewal as long as they still qualify. Unfortunately, once Detroit City Council votes on the
new NEZH boundaries, no new applications will be accepted in the modified areas.
Current NEZH Areas
Current NEZH Areas Page 2
Proposed NEZH District 2021
NEZH Combined Map
Why we’re here ???
DETROIT CITY COUNCIL QUALIFIED PROPERTY PROPERTY OWNERS PUBLIC HEARINGS WILL THE INTENTION IS TO
IS CURRENTLY OWNERS IN NEW AREAS WHOSE NEZH TAX BE HELD BEFORE HAVE THIS PROCESS
REVIEWING THE STATUS WILL RECEIVE AN ABATEMENTS ARE DUE DETROIT CITY COUNCIL COMPLETE IN TIME FOR
AND VIABILITY OF APPLICATION PACKAGE TO EXPIRE IN THE TO DETERMINE WHERE 2021 SUMMER TAX
EXISTING NEZ- FROM THE OFFICE OF 2021/2022 TIMEFRAME NEW NEZ-HOMESTEAD BILLS
HOMESTEAD AREAS THE ASSESSOR ARE ELIGIBLE TO APPLY AREAS WILL BE
WITH THE AIM OF FOR ONE MORE 15 TAX ESTABLISHED
MODIFYING EXISTING ABATEMENT IF THEY
AREAS AND CREATING QUALIFY
NEW AREAS FOR THE
2021 TAX YEAR

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Neighborhood

regarding throughout the City of Detroit

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