How Much Is the Transfer Tax in Michigan: Rates, Exemptions & Refunds

Transfer tax in Michigan runs $8.60 for every $1,000 of the sale price, made up of a $3.75-per-$500 state tax and a $0.55-per-$500 county tax. The seller is legally responsible for paying it at the time the deed is recorded, though certain sales are exempt and some sellers can recover the state portion after closing.

How the Rate Breaks Down

The state charges $3.75 per $500 of value under the State Real Estate Transfer Tax Act.¹ The county adds $0.55 per $500 under a separate statute.² Combined, that’s $4.30 per $500, or $8.60 per $1,000.

Any fraction of $500 in the sale price gets rounded up to the next full $500 before the tax is calculated. A sale of $202,100 is taxed as if it were $202,500.

Calculating What You’ll Owe

Divide the sale price by 500, then multiply by $4.30. A few worked examples:

For a quick estimate, multiply the sale price by 0.0086. That approximation is off only when the price isn’t already a clean multiple of $500, since the rounding rule nudges the taxable amount up slightly.

Who Pays

Michigan law puts the tax on the seller. The state statute makes the seller or grantor liable,³ and the county statute uses nearly identical language.²

Buyers and sellers can negotiate a different split in the purchase agreement, and in competitive markets buyers sometimes agree to cover part of it. The state’s legal claim, however, still runs against the seller regardless of what the contract says.

Exemptions That Wipe Out the Tax

A long list of transfers is exempt from both the state and county tax. The exemptions that come up most often:

Any conveyance where the consideration is less than $100.
Transfers between spouses that create or end a tenancy by the entireties.
Transfers from a parent to a child, stepchild, or adopted child, or from a grandparent to a grandchild, step-grandchild, or adopted grandchild.
Instruments that confirm title already vested in the grantee, including quitclaim deeds correcting a title defect.
Documents given as security for a debt, and assignments or discharges of a security interest.
Leases, including oil and gas leases, and transfers of a leasehold interest.
Conveyances where the grantor is the United States, the State of Michigan, or one of their political subdivisions.
Transfers through mortgage foreclosure or in lieu of foreclosure (the exemption does not carry over to any later sale of the foreclosed property).
Transfers by judgment or court order, unless the court sets a monetary consideration.
Instruments straightening boundary lines when no money changes hands.
Certain transfers between an entity (corporation, LLC, or partnership) and its owners or creditors, if not done to avoid tax.

The full list appears in MCL 207.526 for the state tax and MCL 207.505 for the county tax.⁴ To claim an exemption, the specific statutory basis has to be written on the face of the deed itself. If it isn’t there, the Register of Deeds collects the tax anyway.

Land Contracts

A land contract where legal title doesn’t pass until the buyer pays in full is exempt at signing.⁴ The tax comes due later, when the seller delivers the deed after the buyer finishes paying. Plan for it at the back end of the deal, not the front.

Nonprofits and Churches Are Not Exempt

Michigan’s exemption list has no carve-out for nonprofits, churches, or other religious organizations. A nonprofit buying or selling real estate pays the same transfer tax as anyone else, unless the sale independently fits one of the listed exemptions.

Getting the State Portion Refunded on a Home Sale

Sellers who had a principal residence exemption on the property can often recover the entire state transfer tax after closing. Under exemption (u) of the State Real Estate Transfer Tax Act, the refund applies when the property’s state equalized value at the time of sale hasn’t risen above the SEV from when the seller originally acquired the home (or from the first tax day after a certificate of occupancy issued, whichever is later).⁵ The sale also has to reflect an arm’s-length price, so discounted deals between family members won’t qualify.

File Form 2796 with the Michigan Department of Treasury within four years and 15 days of the sale date. You’ll need the recorded deed showing the tax stamp (or a validated Form 2705 and county treasurer receipt), your closing disclosure, and proof of both the original and current state equalized values.⁵ The refund covers only the state’s $3.75-per-$500 portion, not the county’s $0.55. On a $300,000 sale, that still comes to $2,250.

How and When It’s Paid

Transfer tax is collected at the County Register of Deeds office when the deed is presented for recording. The office won’t record the deed until both the state and county portions are paid, and once payment clears, the county applies a documentary stamp to the deed.

If the sale price isn’t stated on the face of the deed, the parties file a Real Estate Transfer Valuation Affidavit (Form 2705) with the Register of Deeds showing the consideration and, if the price is below market value, the market value as well.⁶ There’s no fee for the affidavit itself.

Sales of Real-Estate-Heavy Entities

The tax reaches beyond ordinary deed transfers. If more than 80% of a business entity changes hands, and real property makes up 90% or more of that entity’s asset value, the transfer of the controlling interest triggers the tax. Controlling interest means more than 80% of a corporation’s stock, an LLC or partnership’s capital and profits interest, or a trust’s beneficial interest.⁶ A Form 2705 valuation affidavit has to be filed when this kind of transfer happens.

1
Michigan Legislature. Michigan Compiled Laws 207.525 – Tax Rate; Statement of Total Value of Real Property Being Transferred; Affidavit; Value of Real and Personal Property Stated Separately
2
Michigan Legislature. Michigan Compiled Laws 207.504 – Rate of Tax; Statement on Face of Written Instrument; Affidavit
3
Michigan Legislature. Michigan Compiled Laws 207.523 – Written Instruments Subject to Tax; Person Liable for Tax; Payment Date; Refund
4
Michigan Legislature. Michigan Compiled Laws 207.526 – Written Instruments and Transfers of Property Exempt From Tax
5
Michigan Department of Treasury. Application for State Real Estate Transfer Tax (SRETT) Refund
6
Michigan Department of Treasury. Real Estate Transfer Tax Valuation Affidavit