Background and How it Works

The housing crisis led to the State of Michigan lending a helping hand. In July 2015, the Michigan Supreme Court readjusted the Michigan Transfer Tax Act to allow more people to recoup taxes paid at the time of the sale of their home. If an individual qualifies for the coveted exemption under the State Real Estate Transfer Tax, a full refund of the sales tax is returned to the seller. So, how do you qualify?

1. The seller utilized the property as their principal residence at the time of the sale;
2. The State Equalized Value (SEV) (what the State of Michigan says your home is worth) of the property in the year of the sale must be equal to or less than the SEV of the property on the date of the purchase/date of the acquisition;
3. The transaction must have been for a price at which a willing buyer and a willing seller would have arrived through an “arms-length” negotiation;
4. the sale must have occurred within four (4) years and fifteen (15) days from the date of filing for the refund.

Together with the application, evidentiary documentation must be included to qualify for the refund. The documentation includes a copy of the recorded deed at the time of the purchase and sale of the property, a copy of the signed HUD-1, and proof of the SEV value of the property. After filing for the application for the refund with the Michigan Department of Treasury, the Special Taxes Division will review the information and decide regarding the potential refund within 6-10 weeks.

What this means for you

In order to help decide if you qualify, all we need is the address of the home sold in the last four years. Simple as that. If it is determined you would qualify for the refund, we will then work to collect the other evidence required. The value of your refund will depend on how much the home sold for (a higher sale price equals a higher tax). There is no cost to see if you qualify. We will only bill for our services if we are successful in recovering your refund. It is a win-win scenario to pick up the phone and call Dylan at Shinners & Cook, P.C.