Does Michigan have a real estate transfer tax?
Yes, two of them. The State Real Estate Transfer Tax Act, 1993 PA 330 (MCL 207.521 to 207.537), levies $3.75 for each $500 or fraction of $500 of the total value of the property transferred. The County Real Property Transfer Tax Act, 1966 PA 134, adds 55 cents for each $500 under MCL 207.504.
Together they come to $4.30 per $500, or $8.60 per $1,000. As a percentage, that is 0.86% of the price, with 0.75% going to the state and 0.11% to the county.
The county statute lets a county with 2,000,000 or more residents charge up to 75 cents per $500 if its board of commissioners authorizes it. Wayne County, the state’s largest, counted about 1.79 million people in the 2020 census, so the 55-cent rate is the one sellers should model.
Who pays transfer tax in Michigan?
The seller. Michigan doesn’t leave this to custom: MCL 207.523(2) says the person who is the seller or grantor of the property is liable for the state tax. The county tax is collected the same way at closing, and Michigan purchase agreements almost always assign both to the seller.
The tax is due to the county treasurer where the property sits no later than 15 days after the deed is delivered to the buyer, and stamps must be bought before the instrument is recorded. In practice the title company collects both taxes from your proceeds and pays them with the recording.
The buyer has a separate filing. Under MCL 211.27a(10), the buyer must notify the local assessor of the transfer within 45 days on the State Tax Commission’s form, usually called the property transfer affidavit. It carries no tax, but it starts the next issue.
The uncapping that follows a Michigan sale
Transfer tax is a one-time cost. The property tax change after a sale lasts much longer, and buyers price it in. Under Proposal A, a Michigan property’s taxable value can rise only slowly while you own it, even when market value climbs. After a transfer of ownership, MCL 211.27a(3) resets taxable value to the state equalized value for the next year.
State equalized value is meant to be half of market value. So a building worth $2,000,000 with an SEV of $1,000,000 and a capped taxable value of $620,000 would see its taxable value jump by $380,000 the year after the sale. The buyer’s property tax bill rises in proportion to the millage.
This is why a buyer often offers less than your current NOI suggests. Bring your last tax bill and the current SEV and taxable value to the first conversation, so the gap is clear early instead of showing up in a retrade.
Controlling-interest transfers: selling the LLC instead of the building
Michigan is one of the states that taxes entity sales. MCL 207.523(1) applies the state tax to contracts for the transfer or acquisition of a controlling interest in an entity with an interest in real property, if the real property makes up 90% or more of the fair market value of the entity’s assets.
Controlling interest means more than 80% of the value of a corporation’s stock, more than 80% of the capital and profits interest of a partnership or LLC, or more than 80% of the beneficial interest of a trust. A single-purpose LLC whose only asset is an apartment building clears the 90% test easily.
So selling 100% of the membership interests in that LLC still triggers the 0.75% state tax, due within 15 days of the transfer. Selling 80% or less does not meet the definition, though splitting a sale to stay under the line needs careful drafting and a tax adviser’s review.
Michigan transfer tax exemptions that matter to investors
MCL 207.526 lists the exemptions for the state tax. Most of the ones an apartment owner will use involve moving property between related parties rather than selling it.
- Transfers between an LLC and its members, or a partnership and its partners, when ownership stays with the same people in the same proportions.
- A controlling-interest transfer that would have been exempt if the same parties had used a deed.
- Transfers that dissolve an entity and move title to its owners, and reorganizations where beneficial ownership doesn’t change.
- Deeds given in a mortgage foreclosure or in lieu of foreclosure. A later sale of that property by the lender is not exempt.
- Conveyances from an individual to a child, stepchild, adopted child, grandchild, step-grandchild or adopted grandchild.
- Mortgages and other security instruments, and leases.
1031 exchanges and the Michigan transfer tax
There is no 1031 exemption. The sale of the property you give up is a taxable transfer at the full 0.86%, and your replacement purchase in Michigan creates no tax for you as buyer, since the seller is liable.
The tax is a selling expense. It reduces the amount realized and your gain for income tax purposes, and in an exchange it can usually be paid from exchange proceeds as a closing cost. Have your intermediary and CPA confirm how it is treated on your settlement statement.
Worked example: transfer tax on a $2M and $5M Michigan apartment building
Take a 30-unit building in Grand Rapids sold for $2,000,000. The state tax is $2,000,000 ÷ $500 × $3.75 = $15,000. The county tax is $2,000,000 ÷ $500 × $0.55 = $2,200. The seller pays $17,200 in total.
At $5,000,000, the state tax is $37,500 and the county tax $5,500, for $43,000. At $3,500,000, the figures are $26,250 and $3,850, for $30,100.
Now suppose the $5,000,000 building is owned by a single-asset LLC and the buyer purchases 100% of the membership interests. The state act still applies to that controlling-interest transfer, so $37,500 of state tax is due within 15 days. Ask your title company how the county treats the same transaction.
| Sale price | State tax (0.75%) | County tax (0.11%) | Total |
|---|---|---|---|
| $2,000,000 | $15,000 | $2,200 | $17,200 |
| $3,500,000 | $26,250 | $3,850 | $30,100 |
| $5,000,000 | $37,500 | $5,500 | $43,000 |
Michigan transfer tax compared with neighboring states
Michigan’s combined 0.86% is high for the Great Lakes region. Wisconsin charges 30 cents per $100, or 0.3%, on the grantor. Ohio’s state conveyance fee is 10 cents per $100, or 0.1%, and counties may add up to 30 cents per $100 more. Minnesota’s deed tax is 0.33%.
For a seller exchanging out of Michigan, that gap is a real number. Selling a $5,000,000 replacement property later in Wisconsin would cost $15,000 in transfer fee, against $43,000 in Michigan.
| State | Rate | Notes |
|---|---|---|
| Michigan | 0.86% combined | 0.75% state + 0.11% county |
| Wisconsin | 0.3% | Imposed on the grantor |
| Ohio | 0.1% state | Counties may add up to 0.3% |
| Minnesota | 0.33% | 0.34% in Hennepin and Ramsey counties |
Will Michigan repeal its transfer tax?
Maybe, but not yet. In May 2026 the Michigan House passed a package of property tax bills that includes House Bill 5874, which would repeal the State Real Estate Transfer Tax Act. On June 2, 2026 it was referred to the Senate Government Operations Committee, and it has not been signed into law.
Repeal bills have been filed before, including a 2024 package that never left committee. Until a repeal is enacted and takes effect, a Michigan sale pays the full 0.86%. If you are timing a sale around it, watch the effective date, since a repeal could apply only to deeds delivered after a set day.
How transfer tax fits into the cost of selling
On a $2,000,000 sale, $17,200 is meaningful but rarely the largest number. Federal capital gains tax, depreciation recapture at up to 25% on the unrecaptured portion, the 3.8% net investment income tax for many owners, and Michigan’s flat income tax usually add up to far more.
A 1031 exchange can defer the income taxes, though not the transfer tax. Seller financing can spread the gain over time through an installment sale. Both can matter more to your net than any negotiation over who pays the stamps.
Ask your title company for a draft closing statement before you accept an offer. It should show the state tax, the county tax, your payoff and recording costs on separate lines, which makes it easy to compare two offers at different prices.
Selling your Michigan apartment building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units across Michigan, including Detroit, Grand Rapids, Lansing, Kalamazoo and Ann Arbor. We buy directly, can offer seller-carry terms, and can close inside a 1031 timeline.
Send the property address and unit count through the form on this page, or call (469) 660-2977. We typically respond within 48 hours, and we’ll walk through your transfer tax, payoff and other closing costs so you can see your net before you commit.
