Michigan targets improper tax breaks on cottages, 2nd homes

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LANSING, Mich. (AP) — Records say thousands of summer cottages, second homes and other Michigan properties have lost a valuable tax break in recent years amid state Treasury Department audits.

The Detroit News reports that the crackdown on improper exemptions affects a wide range of property owners, including Detroit landlords and billionaires with multi-acre compounds.

Records show 23,800 property owners have been ordered to pay more taxes after audits since 2013. The audits target properties that claim a 100 percent principal residence exemption. The tax break saves property owners on school district taxes.

The audits were instituted in 2005 to determine whether property owners getting the tax break owned and occupied the home as a primary residence. In numerous cases, people ended up losing the tax break on rental properties and vacation homes.

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