Question 1

How much is Michigan's transfer tax on a home sale?

Accepted Answer

Michigan's combined state and county real estate transfer tax is $8.60 per $1,000 of sale price, or 0.86%. The state portion is $7.50 per $1,000 ($3.75 per $500) and the county portion is $1.10 per $1,000 ($0.55 per $500). On a $300,000 Grand Rapids sale, the seller pays $2,250 in state transfer tax plus $330 in county transfer tax, totaling $2,580. On the $429,000 average sale price across Holden Richardson's 150 closings, the total transfer tax is roughly $3,689. The tax is collected by the Kent County Register of Deeds at recording.

Question 2

Who pays the transfer tax in a Michigan real estate transaction?

Accepted Answer

By statute and Grand Rapids convention, the seller pays Michigan's real estate transfer tax. MCL 207.523 (state) and the county Public Act 134 of 1966 do not strictly designate the payer, but the universal practice in Kent and Ottawa Counties is to charge it to the seller's side of the closing disclosure. The purchase agreement can override this — occasionally seen in builder transactions, short sales, or REO closings — but in 99%+ of typical residential sales the seller pays. Holden Richardson's net sheets always show the transfer tax on the seller's side so the figure is locked in before list.

Question 3

What's the difference between state and county transfer tax?

Accepted Answer

Two separate Michigan statutes create two separate transfer taxes that combine on every deed. The State Real Estate Transfer Tax (Public Act 330 of 1993, MCL 207.521 et seq.) is $3.75 per $500 of consideration, or 0.75%. The County Real Estate Transfer Tax (Public Act 134 of 1966, MCL 207.501 et seq.) is $0.55 per $500, or 0.11%. Both are paid in a single transaction at deed recording, but they go to different jurisdictions — state to Michigan Department of Treasury, county to the Kent County Register of Deeds. They show as two separate line items on the seller's closing disclosure.

Question 4

Are there exemptions from Michigan transfer tax?

Accepted Answer

Yes. MCL 207.526 lists exemptions from the state tax, including transfers between spouses, parent-to-child or grandparent-to-grandchild gifts, transfers to or from governmental entities, name-change deeds without consideration, correction deeds, transfers to revocable living trusts of the same grantor, deeds with consideration under $100, and certain foreclosure-related transfers. The county tax has parallel exemptions under MCL 207.505. To claim an exemption, the deed itself must cite the specific statutory subsection — the title company prepares this, but the seller's attorney should confirm the citation is correct before recording.

Question 5

Does the transfer tax apply to land contract sales?

Accepted Answer

Transfer tax in Michigan is triggered by the recording of a deed conveying title. Land contracts (installment sales) do not transfer title at execution — title transfers when the contract is paid off and the deed is recorded. This means the transfer tax is paid at the deed recording, which can be years after the land contract was signed. The tax is calculated on the consideration in the deed, which is typically the original land contract price plus any documented adjustments. Talk to a Michigan real estate attorney for fact-specific guidance on land contract closings.

Question 6

How does Michigan's transfer tax compare to other states?

Accepted Answer

Michigan's combined 0.86% rate is moderate. Some states have no transfer tax (Texas, Wyoming, Idaho); some have just a flat fee ($30 in Mississippi). Higher-rate states include Delaware (4%), New York (varies, 1–2.65% in NYC), and Washington State (1.28% state plus local). Michigan's $8.60 per $1,000 falls roughly in the middle of US states. For a Grand Rapids seller comparing the cost of selling here vs. relocating, the transfer tax is meaningful but not the dominant cost — agent commissions, prorated taxes, and title fees are typically larger line items.

Question 7

When and where is the transfer tax actually paid?

Accepted Answer

The transfer tax is paid to the Kent County Register of Deeds (or Ottawa County, depending on property location) at the time the deed is presented for recording — typically the business day after closing. The title company collects the funds at the closing table from the seller's proceeds and remits them to the county on the seller's behalf along with the deed. The county then transmits the state portion to the Michigan Department of Treasury. The seller never writes a check directly — it comes off the top of net proceeds at closing.

Question 8

Can the buyer agree to pay the transfer tax instead?

Accepted Answer

Yes, the purchase agreement can shift transfer tax to the buyer, though it is uncommon in Grand Rapids residential sales. Builders sometimes offer to pay transfer tax as a closing-cost concession on new construction. Investor purchasers occasionally negotiate to absorb the tax as part of a discounted purchase price. The shift must be explicit in the contract and shows up on the buyer's side of the closing disclosure. Holden Richardson of 616 Realty has seen this on roughly 3% of transactions over 11 years — almost always builder or REO deals, rarely on resale.

Question 9

How is transfer tax calculated on a sale that includes personal property?

Accepted Answer

Michigan transfer tax applies to the value of real property transferred — not to personal property like furniture, appliances, or equipment included in the sale. If a Grand Rapids home sells for $310,000 and the contract allocates $5,000 to a riding mower, hot tub, and washer/dryer, the transfer tax is calculated on $305,000 of real property: $305,000 × 0.0086 = $2,623. The allocation must be reasonable and documented in the purchase agreement. Aggressive personal property allocations can be challenged by the assessor and the Department of Treasury.

Question 10

What if the property sold for less than I owe — do I still pay transfer tax?

Accepted Answer

Yes, in a normal short sale the seller still owes transfer tax, calculated on the actual sale price, regardless of underwater status. On a Grand Rapids short sale at $250,000, transfer tax is $250,000 × 0.0086 = $2,150. In practice, short sales often shift transfer tax to the buyer or to lender concessions because the seller has no proceeds to pay it from. There are limited exemptions for certain federally-mandated short sales and foreclosure-related transfers under MCL 207.526(u). For the full county-by-county breakdown including short sale and exemption details, see my long-form guide.

What is the Michigan real estate transfer tax when selling a home?

What You Need to Know

Most Relevant sellers Questions

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