Form 2704a - Application For Neighborhood Enterprise Zone Certificate Page 4
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4Additional Documents Required by the State to Issue a NEZ Certificate
Some documents may be obtained from the builder/developer.
Additional documents required for a New facility project:
•
A signed application completed by the new owner/occupant. Most of the information needed can be taken from
the original application filed by the developer. Be sure to make a copy of both pages of the application.
•
A copy of the legal description of the real property with parcel code number of the property for each
house/condo being built.
•
A copy of the building permit. Please make sure the copy of the permit (building/trade permit) sent to the State
is clear and legible.
•
A copy of the new owners Warranty Deed showing ownership with the date deed was executed and signatures.
•
A copy of the Certificate of Occupancy and Compliance.
Additional documents required for a Rehabilitated facility:
•
Documentation proving the cost requirements of Michigan Compiled Law (MCL) 207.772(k) is met. A
breakdown of investment cost for each house, condo or unit being rehabilitated and the square footage for each.
•
A copy of the legal description of the real property with parcel code number of the property for each
house/condo being built or rehabilitated.
•
A clear and legible copy of the building/trade permit. For a rehabilitated facility you may not have a building
permit but you will have trade permits, send copies of the trade permits.
•
A copy of the new owner’s Warranty Deed showing ownership with date the deed was executed and signatures.
•
A certificate of occupancy and compliance, or certification by the local building official that the building meets
minimum building codes for the local unit. Applicant must contact the building official.
•
A copy of the statement by the assessor showing taxable value of the rehabilitated facility, not including the land,
for the tax year immediately preceding the effective date of the rehabilitation.
Transfer of an existing certificate
Existing NEZ certificates may be transferred to a new owner by filing the completed application (form 2704A) and a copy
of the warranty deed for the subject property with the State Tax Commission.
Tax Advantage for a NEZ Facility Exemption
The NEZ tax for a “Rehabilitated facility” is determined by multiplying the total mills levied as ad valorem taxes by the taxable
value, not including land, for the tax year immediately preceding the effective date of the certificate, unless the effective date is
adjusted by MCL 207.780(3). If the effective date is adjusted or the certificate is approved after 12/31/2005, the taxable value
remains “frozen” until the last three years of the certificate and is then adjusted as described below.
The NEZ tax for a “New facility” is determined by multiplying one-half the average state-wide homestead mills levied in this state
in the immediately preceding calendar year by the taxable value of the “New facility”, not including land, until the certificate
expires, unless the effective date is adjusted by MCL 207.780(2). If the effective date is adjusted or the certificate is approved after
12/31/2005, the exemption is adjusted as described below. The state-wide average homestead rate is set by the Michigan
Department of Treasury, Bureau of Local Government Services on an annual basis.
In the last three years of the exemption, the exemption applies to only the number of mills levied for the county and LGU
operating purposes (does not include debt millage); multiplied by the current taxable value. Any county or LGU debt millage and all
other millages levied by all other taxing authorities would be levied at the full millage. Land is not included in this exemption.
In the tax year, two years before the certificate expires, the percentage of mills exempted for the county and LGU operating mills
changes to five-eighths (does not include debt millage); multiplied by the current taxable value.
In the tax year, one year before the certificate expires, the percentage of mills exempted for the county and LGU operating mills
changes from five-eights to three-fourths (does not include debt millage); multiplied by the current taxable value.
In the year that the certificate expires, the percentage of mills exempted for the county and LGU operating mills changes from three-
fourths to seven-eighths (does not include debt millage); multiplied by the current taxable value.
The LGU may grant an exemption for 6 to 15 years, or 11 to 17 years for a historic building.
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