Michigan real estate transfer tax

In Michigan the seller pays the transfer tax, and on most sales it is two taxes rather than one. Here is what it costs, how it is worked out, and the exemption that a lot of sellers are owed and never claim.

Who pays it

The seller does. Michigan law puts the liability on the seller or grantor, and it is collected when the deed is recorded, so in practice it comes out of your proceeds at closing and appears on the settlement statement.

There are two separate taxes on the same transfer: a state tax and a county tax. They are set by two different statutes and they are charged together.

The rates

TaxRateAs a percentageOn a $300,000 sale

State$3.75 per $5000.75%$2,250

County$0.55 per $5000.11%$330

Total$4.30 per $5000.86%$2,580

The county rate is $0.55 per $500, and that is the rate in every Michigan county. The statute allows a higher county rate of up to $0.75 per $500, but only where county population reaches 2,000,000 — a threshold no Michigan county meets, Wayne included, so it applies nowhere in the state.

How it is calculated

Not as a straight percentage. The tax is charged on each $500 of value or fraction of $500, which means the figure rounds up rather than scaling smoothly.

On a $300,000 sale that makes no difference: $300,000 divides into exactly 600 units of $500. On a $300,100 sale it does. That becomes 601 units, so the state tax is 601 × $3.75 = $2,253.75 and the county tax is 601 × $0.55 = $330.55, a few dollars more than a flat 0.86% would suggest.

The calculator above does this properly rather than multiplying by 0.86%.

The exemption most sellers have never heard of

If the property was your principal residence, and the state equalized value when you sell is equal to or lower than the state equalized value when you bought it, and the sale is at arm’s length, the transfer is exempt from the state transfer tax under section 6(u) of the State Real Estate Transfer Tax Act.

That is the 0.75% portion, which is the large one. On a $300,000 sale it is $2,250.

It matters most to anyone who bought near a market peak and is selling into a softer one, and it is claimed far less often than it applies. If the tax was already paid at closing, the seller, or the buyer who paid it on the seller’s behalf, can apply to the Michigan Department of Treasury for a refund on Form 2796. The deadline is four years and fifteen days from the date of the sale.

State equalized value is not the same as your taxable value or your assessment notice total. It is roughly half of what the assessor considers market value. You will find it on your assessment notice, or the local assessing department can give you both figures.

Other common exemptions

The statutes list a long set of exempt transfers. The ones an ordinary seller runs into are transfers where the consideration is under $100, transfers between certain family members, transfers to correct or confirm a deed, court-ordered transfers, and transfers by foreclosure or deed in lieu. Each has conditions, and the deed has to state the exemption being relied on when it is recorded.

The state and county exemptions come from two different statutes and they are not identical, so a transfer can be exempt from one tax and not the other. Both are linked under Sources below.

What to do about it at closing

Your title company calculates the tax and collects it at closing. Two things are worth doing before you sign.

Ask for the transfer tax figure on the draft settlement statement early rather than at the table, and if you think section 6(u) applies to you, raise it before closing rather than after. Claiming it at closing is simpler than filing for a refund later, although the refund route stays open for four years and fifteen days.

Sources

Rates and rules on this page come from the statutes and from a county register of deeds rather than from secondary summaries.

MCL 207.525, state rate and seller liability MCL 207.504, county rate MCL 207.526, state exemptions including 6(u)MCL 207.505, county exemptions Treasury notice on documenting a 6(u) claim Treasury Form 2796, refund application Wayne County Register of Deeds, rates charged at recording Macomb County Register of Deeds, seller liability and exemptions

Verified September 2026. This page explains how the tax works. It is not tax or legal advice, exemptions turn on the specific facts of a transfer, and your title company and your own adviser are the people who determine what applies to your sale.

Common questions

Does the buyer ever pay the transfer tax?

The liability sits with the seller under Michigan law. A purchase agreement can allocate the cost differently between the parties, but the obligation itself is the seller’s.

Is transfer tax the same as property tax?

No. Property tax is charged every year on what you own. Transfer tax is charged once, on the transfer itself, and is settled when the deed is recorded.

Does the transfer tax apply to a land contract?

A contract for the sale or exchange of property is within the scope of the statutes, so it can. The timing and the mechanics differ from an ordinary deed, and this is one to put to your title company rather than to assume.

How do I find my state equalized value?

It is on the annual assessment notice from your city or township assessor, and the assessing department can tell you both the current figure and the one from the year you bought.

I sold last year and paid the tax. Is it too late?

Not necessarily. A refund application under section 6(u) can be filed within four years and fifteen days of the sale, so a sale from last year is still inside the window.

Do you handle this for me?

We flag it. If it looks like section 6(u) applies to your sale, it gets raised with the title company before closing rather than discovered afterwards. The determination itself is made by the title company and Treasury, not by us.

Where this fits in your sale

Transfer tax is one line on the settlement statement. The rest of what it costs to sell covers the others: title and closing charges, the $30 recording fee, your mortgage payoff, and the listing-side cost that is the part you actually choose.

The proceeds calculator puts the transfer tax figure above together with your payoff and the rest, so you end up with one number instead of a list. Neither calculator asks for contact details.

If you already know how you want to sell, see what the packages cost or start a listing.