Rosa purchased a home in Kent County, Michigan three years ago for $200,000. She is now selling it for $260,000. Rosa's agent mentions that she may qualify for a partial refund of the state transfer tax she previously paid when she purchased the home. Under Michigan law, what is the basis for this potential refund?
Correct Answer
A) Michigan allows sellers to claim a refund of the state transfer tax paid on a prior purchase if the property is sold for a price lower than the original purchase price
Michigan provides a state transfer tax refund mechanism for sellers who previously paid the state transfer tax as buyers and are now selling the property. Specifically, if the seller (who originally paid state transfer tax as a buyer) sells the property for a price less than or equal to the original purchase price, they may be eligible for a refund of the state transfer tax previously paid. This provision is designed to provide relief in declining market situations. Note: Rosa is selling for more than she paid, so she would not qualify in this scenario—but the refund mechanism itself is based on selling at or below the original purchase price.
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