NEZ Homestead

On June 15, 2021, the Detroit City Council voted to accept the NEZ Homestead (NEZ-H) boundary modifications and newly established NEZ Homestead zones. If you received a letter from the Office of the Assessor identifying that your property is located in one of the NEZ Homestead zones, if you meet the criteria, you are now eligible to apply. 

Once the NEZ Homestead application is processed, a Neighborhood Enterprise Zone Homestead Letter of Declaration will be mailed to the taxpayer.  For as long as the NEZ-H certificate remains in effect, it is your responsibility to notify your mortgage company that you will receive TWO tax bills in the summer and TWO tax bills in the winter.  One bill is for the land and the other is for the building(s).  The abatement only applies to the parcel with the building.  Please be advised that failure to pay either tax bill can result in removal of the NEZ-H designation or tax foreclosure on the property.

The NEZ Homestead abatement reduces both the City of Detroit and the Wayne County Operating Millage by 50 percent. This typically results in a 15 to 20 percent savings for most homeowners. Please keep in mind, the tax savings is a reduction in the City and County operating millage rates. All other millage rates and fees remain the same.

In order to determine if you are eligible for the NEZ-H property tax abatement: 

  • You must have purchased your home after December 31, 1996
  • You must both own and occupy your home as your primary residence. The deed or land contract must be in your name, you must have a Property Transfer Affidavit (PTA) and Principal Residence Exemption (PRE) on file with the Office of the Assessor.
  • You must commit to a minimum of $500 in repairs/improvements to your home over a two-year period.

Please read before applying:

Before proceeding, note applications for same year purchasers will not be processed until the following year after the close of the March Board of Review, it will be processed before the summer tax bills are prepared.  Gather the following items and be ready to attach them to the online application. The attachments can be in PDF, JPEG, or Microsoft word format. These attachments are required for submission:

  • A copy of your registered deed, or land contract.
  • A copy of your driver’s license identifying you live at the property under application. 
  • A copy of your Principal Residence Exemption (PRE). 

 

Neighborhood Enterprise Zone Homestead Application

 

 

Email: [email protected]

 

NEZ map

 

 

 

 

NEZ FAQs

1. 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. 
 

 2. What are the requirements for the program? 
  • Your property must be in one of the NEZ Homestead Districts throughout the City of Detroit 
  • You must have purchased the property after 12/31/1996 
  • You must both own and occupy the property as your principal residence 
  • 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 
 3. 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. 
  • 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. 
    • 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. 
    • 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 
    • 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. eview. 
 4. 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 
 5. How long does the abatement last? 

The abatement certificate is issued for 15 years and will last if you own your home 

 6. 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. 

 7. 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 
 8. 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 
 9. 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 if they still qualify. Unfortunately, now that the Detroit City Council voted on the new NEZH boundaries, no new applications will be accepted in the modified areas.

 10. How many tax bills will I receive?

In both July and December, you will receive two tax bills: one for the structure with the NEZ Certificate with tax calculated based upon the NEZ specific tax, and one for the land with tax calculated at the full ad valorem millage rate.