Michigan State Transfer Tax Exemption
In 1993, the State of Michigan implemented the state real estate transfer tax. When a home is sold in Michigan, there is a transfer tax that must be paid by the seller. This tax is based on the sale price of the home and is equivalent to $7.50 per $1,000 or the sales price on all home sales (unless the transaction is exempted under the statute).
There is a portion of this statue that can potential help some sellers. It has been on the books for years but is only coming to light due to our recent decline of values. If the current owner sells their property and the current assessed value is less then when they purchased the property, they do not have to pay the State Transfer Tax.
This could affect owners that have purchased a property in the top of the market and are now forced to sell at a loss. Since the tax is calculated on the "Sales Price", some due diligence must be done to find out if your seller qualifies for this exemption. This is not the duty of the title company, it is your accountability duty to your client to research this information and find out if they are eligible for the exemption. This could potentially save your client thousands of dollars depending on the price of the home.
This exemption only applies to the STATE tansfer tax. There are NO exceptions to the COUNTY transfer tax.
402 E. Front St. Traverse City, MI 49686