Tax Refund for Michigan Transfer Tax

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    Recently Governor Snyder signed House Bill 4173, which provided clarity to 2 items of the Michigan Real Estate Transfer Tax:

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

    2. Clarify that the Exemption “U” applies when the State Equalized Value (SEV) at the time of sale is less than or equal to the original SEV. The Michigan Supreme Court broaden the definition to remove the fact that True Cash Value be realized. Additionally the new law gives the same right to the refund to both buyers and sellers.

    First a couple of items to consider:

    1. Typically sellers are the party that paid the transfer tax – but not always sometimes the buyers have paid the transfer tax.
    2. This applies retroactive and applies to sales of a principal residence (for which a principal residence exemption is claimed) on or after June 24, 2011. The form must be filed within 4 years and 15 days from the date of sale or transfer of the property.

    So how can you take action on this? Remember a couple of things on this – you are asking for a refund from the government, and you have to prove you qualify. While it is not overly difficult, it is not a quick click on a website either.

    1. You want a copy of your closing statement. This is typically best found by locating your closing papers. You would have received this when you closed on your home – the documents were prepared by the title company and typically are on paper (in a large legal sized envelope) or on CD or perhaps even a jump drive or emailed.
    2. You want a copy of the recorded deed containing the tax stamp (ask the title company that originally assisted you in the closing.)
    3. You need to complete the following form on the State of Michigan’s website: https://www.michigan.gov/documents/2796f7_2601_7.pdf

    4. To determine the historical SEV and SEV upon sale you will need to call the city or township treasurer where you sold your home (they will provide those numbers.)

     

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