Whether petitioner was entitled to a 100% principal residence exception (PRE) even though a portion of the property was rented out for part of the year; MCL 211.7cc(16); MCL 211.7dd(c); Rentschler v Melrose Twp; “Multi-purpose structure”; The Michigan Department of Treasury Principal Residence Exemption Guidelines; Tax Tribunal (TT)

Holding that where a property otherwise qualifies for the PRE, the fact that a portion of the property is rented out for part of the year as an Airbnb or similar use does not disqualify it from a 100% PRE, the court reversed the TT’s decision to the contrary and remanded for entry of judgment for petitioner. Respondent-township found petitioner’s property was disqualified from receiving the PRE because over 50% of the property was used as an Airbnb. The TT then found that only 30% of property was used as an Airbnb and thus, petitioner was entitled to a 70% PRE. On appeal, the court agreed with petitioner that the TT erred in its analysis and that he should receive a 100% PRE. The TT’s “opinion provides no analysis or citation to authority for the proposition that use of a portion of the residence for Airbnb turns the house into a ‘multiple-purpose structure’ under” MCL 211.7cc(16). And respondent presented “little argument regarding the multi-purpose structure analysis other than referring to four examples contained in the Michigan Department of Treasury Principal Residence Exemption Guidelines.” As the court noted in Rentschler, the Guidelines lack the force of law. Further, it did “not see that allowing transient guests to stay in one’s home is being a sufficiently distinct purpose to lead to the conclusion that the structure now has multiple purposes.” Rather, the court determined “that the purpose for which the structure exists, whether it be for the property owner or for the Airbnb guests, is to provide a place to sleep, rest, read a book, look out over the lake, etc. While there may be a pecuniary interest for the property owner, it is not sufficiently different than providing a room to a boarder who pays rent to deem it a separate purpose.” The court noted it could neither ignore nor distinguish Rentschler. “If completely renting out a principal residence for a portion of the year does not disqualify it from the PRE, we cannot conclude that renting out a portion of the property for a portion of the year would disqualify the owner from claiming the PRE.”