Saturday, July 16, 2011

5045 Ruby, Gladwin MI - Island Lake SOLD!

You'll LOVE the View and Sandy Beach at the Island Lake Cottage!
2 Bedrooms, 1 Bath, 2 Car Garage


You'll enjoy the beautiful views and the sandy swimming beach at the cozy woodland, lake cottage on beautiful Island Lake. This cottage sits on a large lot with a nice 2 car garage. Watch loons and bald eagles from your enclosed porch or open deck, facing the lake. Let the kids play in the lake with the sandy lake bottom. Island lake offers good fishing and a leisure atmosphere on a no-gas-motors fishing lake. Island Lake also offer approx 230 acres of association shared land for walking, hunting and ATV's. Island Lake is also located just a very short distance from the designated snowmobile trails.

Wednesday, July 06, 2011

Re-Cap on the Michigan Transfer Tax Act


Attorney General Mike Cox issued an important opinion this week clarifying the proper application of an obscure exemption contained in the Michigan Transfer Tax Act. The opinion, arising out of a request from Representative Martin Griffin (D-Jackson), should afford certain home sellers immediate financial relief as Michigan’s real estate market continues its road to recovery.

Exemption “t”, as designated in the Michigan Transfer Tax Act, sets forth that a seller may seek an exemption from paying the state transfer tax if the following criteria are met:

1. The property must have been occupied as a principle residence, classified as homestead property;

2. The property’s State Equalized Value (“SEV”) for the calendar year in which the transfer is made must be less than or equal to the property’s SEV for the calendar year in which the transferor acquired the property; and

3. The property cannot be transferred for consideration exceeding its true cash value for the year of the transfer.

With property values and corresponding SEV declining due to the struggling economy, home owners and real estate agents first took notice of the exemptions possible applicability under the State Transfer Tax. However, absent an official interpretation, there was little awareness of its proper application.

The opinion from the Attorney General uses examples to show how the application would apply. One example illustrating application provides:

If the SEV of the principle residence when acquired in 2006 is $74,000.00 and the SEV when transferred in 2008 is $72,000.00 then criteria one and two above are satisfied. You can establish the true cash value by doubling the SEV at the time of transfer. In this case the true cash value is $144,000. If the sale price in 2008 is $140,000.00 then the sale does not exceed its true cash value. All three criteria are satisfied and the exemption would apply.

The Attorney General’s opinion provides immediate relief to home sellers already faced with the reality of declining value on their single greatest asset.

Sellers should be cautioned that a request for the exemption that fails to meet all three criteria could bring a penalty equal to 20% of the tax assessed in addition to the tax due.

Additionally, no similar exemption exists in the County Real Estate Transfer Tax Act.