Michigan Tax Relief Programs

Tax Relief Programs for Michigan’s Landowners

There are two programs in Michigan that can lower a landowners’ property tax on forested land. The first program is the Qualified Forest Program (QFP) and the other is the Commercial Forest Act (CFA). Each program is different and has different requirements. Both programs require landowners to give up their development rights. It is also cost prohibitive to withdrawal land lands once it is enter into a program.

Qualified Forest Program (QFP)

In September 2006 the General Property Tax Act (1893 PA 206, as amended) was amended to add the Qualified Forest Property tax exemption (Public Acts 378, 379 and 380). The intent of this tax exemption is to encourage private landowners to manage their land for forestry by providing a property tax reduction as an incentive. Landowners approved for this tax exemption are exempt from some school operating taxes. Participating landowners are not required to allow public access on their land.

Who Qualifies?

Landowners approved for this exemption must have a minimum of 20 vacant, contiguous acres (no buildings or structures are allowed), and are limited to exempting 640 acres per taxing unit. The land must be 80% or more in productive forest capable of growing 20 cubic feet per acre per year or more. Acreage can be divided to split developed from non-developed acreage.

What are the benefits?

The benefit to landowners from enrolling in QFP is that the enrolled forestland is exempt from certain school operating taxes (up to 18 mills). This can be a reduction of roughly half of the current taxes.

What are the requirements?

Landowner must have an approved forest management plan. The acreage in the program cannot have buildings or structures. The local tax collecting unit assessor will determine if the land is qualified forest property based upon a recommendation from the Michigan Department of Natural Resources (MDNR). The landowner must have an approved forest management. Additionally, the applicant must also “attest” that the property will be managed according to the plan. Since forest productivity is an important provision of QFP, forestland owners must report the volume of timber produced on their enrolled property each year to the MDNR.

Commercial Forest Act (CFA)

Michigan's commercial forest program provides a tax incentive to landowners who manage their property for long term timber production. Landowners enrolled in the program pay reduced property taxes and the state of Michigan pays an additional amount to counties where the land is enrolled to help make-up for the tax reduction.

Who Qualifies?

A landowner must have a minimum of 40 contiguous forested acres in one ownership and must be available for listing as CFA. The owner must own the timber rights for the land.

What are the benefits?

Landowners participating in this program pay a reduced property tax of $1.30 per acre annually. Additionally, the State of Michigan pays $1.30 per acre annually to each county where land is listed in the program.

What are the requirements?

Commercial forest landowners must allow access for the purposes of hunting and fishing. The landowner retains all other private property rights. The Commercial Forest Act requires that landowners manage the property for commercial timber production and must have a written management plan. The land must be at least 75% productive forest land capable of producing 20 cubic feet per acre per year. Christmas tree farms are not eligible. The law prohibits other activities on the land such as agriculture, grazing, and industrial, residential, resort or commercial activities. The law also requires that there must be reasonable access to the property for it to be included in the program. Inaccessible tracts are not eligible for CFA consideration. Newly planted trees must have survived through 2 growing seasons before the planted land can be considered for listing.