Tax Update - Extension of Michigan Real Estate Transfer Tax

The Michigan real estate transfer tax (“MRETT”) has been extended to contracts for the transfer or acquisition of an outstanding interest in an entity if the real property owned by that entity is 90% or more of the entity’s fair market value. Historically the MRETT only applied to the actual transfer of title to real estate by means of a deed or a land contract. As a result, real estate held by an entity whose ownership changes was not subject to the MRETT. One common use was to have family cottages and homes held in an entity and then the ownership of the entity was passed from generation to generation. This saved the MRETT and also kept the property tax from being reassessed with each transfer. Now, if more than an 80% interest in a qualifying entity is transferred, the transaction will be subject to the MRETT. There are certain transactions of interests of more than an 80% interest that are exempt from the MRETT. For more information, please contact us.

This publication is for general information only and is not intended as formal legal advice. If you have any questions or need assistance, please contact Curtis & Curtis, P.C.

Curtis & Curtis, P.C. is a full service law firm located in Jackson, Michigan providing superior legal services and advice to individuals, families and businesses throughout mid-Michigan since 1901.