County says that old house still 100% claimed as homestead for taxes...?

Question

Snooping around online today...I discovered that the county (here in MI) still lists my old home that we moved out of 2 years ago (we still own it and are renting it out until it sells) as 100% eligible for the homestead tax. What does this mean for me? We have never claimed the house on our tax returns for the credit since I knew that it wasn't eligible. Does this mean that the city has not been getting all the taxes due on the house? If I point this out, I'd assume the city will come after us for back taxes.

Answer 1

You are correct that they will attempt to collect the back tax if they discover the issue.  You can claim the rental deductions without effecting the property tax issue directly as the IRS does not report that information to the county.  Normally the county learns about these issues when you apply for the second exemption on a new home.