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Property Transfers

New Law takes effect December 31, 2013 & expanded for 2015

P.A. 497 of 2012 indicated that beginning December 31, 2013, a transfer of residential real property is not a transfer of ownership if the transferee is related to the transferor by blood or affinity to the first degree and has been expanded for 2015 to include adopted children, granparents and grandchildren, and the use of the property does not change following the transfer of ownership. See MCL 211.27a(7)(s). (1)

See also STC Bulletin 3 of 2013

The following information was taken from the Transfer of Ownership Guidelines (see link below) published by the State Tax Commission:

Is a transfer of property from a parent to a child a transfer of ownership?

Beginning with transfers occurring on and after December 31, 2014 only, no but only for property classified residential real and if the use of the real property does not change following the transfer of ownership.

Does this include relatives other than those related by blood?

Affinity to the first degree includes the following relationships: spouse, father or mother, father or mother of the spouse, son or daughter, including adopted children and son or daughter of the spouse.

When does this provision go into effect?

P.A. 497 of 2012 indicates that this provision is effective beginning December 31, 2013. Therefore, it is in effect only for transfers that occur on December 31, 2013 and after.

Examples

John and Jane Doe transfer their residential real property to their daughter Judy on December 1, 2013. Is this a transfer of ownership?

Yes, as long as no other exemption provisions apply.

John and Jane Doe transfer their residential real property to their daughter Judy on January 15, 2014. Is this a transfer of ownership?

No, as long as Judy maintains the same use of the property. MCL 211.7a(7)(s).

John and Jane Doe transfer their residential real property to their son Jack on March 1, 2014. Jack decides he wants to turn the house into a vacation rental home. Is this a transfer of ownership?

Yes, as long as no other exemption provisions apply because Jack has not maintained the use of the property.

The Property Transfer Affidavit (PTA) (Form 2766) is a result of the Proposal A reforms. The form is used to inform the local assessor of the transfer (sale, inheritance, etc.) of property. Before Proposal A, taxes were based on the Assessed Value of property. After Proposal A, a new value was added to your property entitled “Taxable Value” which is the value used to calculate your property tax bill. Proposal A “caps”, or limits , the rate of increase of your property’s “taxable value”. The taxable value cannot rise faster than the rate of inflation * (excepting value added through additions or deletions to the property) until the property is transferred. In the tax year following the transfer of the property, the taxable value will “uncap” and become equal to the current “assessed value”. Assessed value represents approximately 50% of market value. In order to ensure that this “uncapping” adjustment is made on all transferred property, the law now requires the transferee (buyer, inheritor, etc.) to file this form within 45 days of the transfer.

Title companies generally make the Property Transfer Affidavit  available to buyers and sellers at the closing. However, it is in your best interest to be certain that the assessor receives these forms. You may call this office during regular business hours to check your property’s status.

Transfer of Ownership & Taxable Value Uncapping Guidelines (PDF)

Inflation Rate Multiplier (CPI)

(CPI)

*The Inflation Rate Multiplier determined by the State of Michigan for 2020 is 1.019.

This is statewide and mandated by the State of Michigan.
The Assessor does not have any control over the Inflation Rate Multiplier.

BULLETIN 15 OF 2019: Inflation Rate Information
Information on the CPI (Current Price Index)


INFLATION RATE MULTIPLIERS AS DETERMINED BY THE CPI*

2019 CAPPED TAXABLE VALUE FORMULA

2020 CAPPED VALUE = (2019 Taxable Value – LOSSES) X 1.019 + ADDITIONS

*The CPI is determined by the State of Michigan and is applied to all Taxable Values in all classes of property throughout the State of Michigan.
The Assessor does not have any control over this figure.

2020 - 2015

2020: 1.019

2019: 1.024

2018: 1.021

2017: 1.009

2016: 1.003

2015: 1.016

2014 - 2005

2014: 1.016

2013: 1.024

2012: 1.027

2011: 1.017

2010: 0.997

2009: 1.044

2008: 1.023

2007: 1.037

2006: 1.033

2005: 1.023

2004 - 1995

2004: 1.023

2003: 1.015

2002: 1.032

2001: 1.032

2000: 1.019

1999: 1.016

1998: 1.027

1997: 1.028

1996: 1.028

1995: 1.026