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Tax Refund

As Derek discussed on the Hardcore Mortgage Real Estate Business Show in May 2016...


IF YOU SOLD A HOMESTEADED PROPERTY IN MICHIGAN ON OR AFTER June 24th, 2011, OR YOU KNOW SOMEONE WHO DID, THIS INFORMATION COULD BE VERY VALUABLE!  This page and website are not providing, and do not provide, tax and/or legal advice.  You must seek professional counsel from experts in those disciplines.  This page is intended to inform our clients and others of the January 2016 changes as relate to the state portion of the Michigan Transfer Tax Law (also known as tax stamps).  Read more below and access both the House Bill, and the Refund Request Form.

In Michigan when real property is sold, and if an exemption does not apply, taxes to the state and county must be paid.  This recent law change applies to the state portion only and adds clarification to what had previously been a cumbersome and confusing exemption.  The state tax portion is $3.75 for every $500 increment in sales price.  So, some examples are as follows:

Sales Tax  |  State tax paid
$250,000       $1,875
$350,000       $2,625
$450,000       $3,375
$550,000       $4,125

Per the Michigan Realtors®, at the close of 2015, Governor Snyder signed into law legislation providing clarity to Michigan’s State Real Estate Transfer Tax.  House Bill 4173, sponsored by Realtor®-member and Representative Dave Maturen (R-Brady Twp.) revises the State Real Estate Transfer Tax to clarify two items:

1.  The party that paid the transfer tax may request the refund if a refund is due, and

2.  Clarify that Exemption (u) applies when the SEV at the time of sale of a Principle Residence is less than or equal to the original SEV on the purchase.

The Michigan Supreme Court recently broadened the application of Exemption (u) by removing the requirement that True Cash Value be realized in a transfer. The legislation enshrines this change, offering important clarity and tax relief to distressed sellers.

In addition, this legislation gives buyers the same refund rights as sellers when it is determined that the transfer tax was paid unnecessarily by a buyer. Refund rights under the Sate Transfer Tax are available up to 4 years and 15 days from a transfer.

Click on the links below to access the House Bill verbiage, and the Application for State Real Estate Transfer Tax (SRETT) Refund:

House Bill No. 4173 - Public Act 217 - 2015-PA-0217

Michigan Transfer Tax Refund Request Form.pdf

Derek Bauer | 248-782-5514 | Email Me
346 N. Lafayette St. - South Lyon, MI 48178
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