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Real Estate Transfer Tax Refund

Real Estate Transfer Tax Refund: 

At the end of 2015, Governor Snyder signed a house bill that provides clarity to the Michigan’s Real Estate Transfer Tax. House Bill 4173 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 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.

This legislation will offer 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 State Transfer Tax are available up to 4 years and 15 days from a transfer.

Frequently Asked Questions:

QUESTION: We sold our principal residence in 2013 and the SEV was lower at the time they sold it than when they purchased it. We sold the house at a profit; will we still be entitled to the refund?

ANSWER: YES, to qualify for the state transfer tax refund, the SEV at the time of purchase must be higher than the SEV at the time of sale. The fact that you sold the house at a profit has no effect on their ability to get a refund.

QUESTION: We bought vacant land in 2011 on which we had a house constructed in 2012. We sold the house in late 2014. Will we be entitled to a state transfer tax refund if the SEV of their property at the time the house was completed was more than at the time of sale?

ANSWER: NO, since at the time of purchase, the land was vacant, you cannot claim a refund of the state transfer tax since the property was not their principal residence at the time of purchase.

To Sum Up: If you think that you may qualify for the refund, give us a call and we can help! We can research if the SEV was lower at the time of sale and the time of purchase and help you with the paperwork that needs to get completed. The transfer tax is .75% of the sales price which can add up to a decent amount of money – we would love to get this refund for you!

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Office: 616.363.7788
Email: julie@juliegr.com, corrin@juliegr.com
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Information Credit: http://www.mirealtors.com

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