A Michigan property has been owned by the same family for 20 years. The taxable value is $95,000, the SEV is $200,000, and the assessed market value is $400,000. The property is transferred to the owner's adult child as a gift. How will the taxable value be treated for the following tax year?
Correct Answer
D) The taxable value resets to $200,000 because the gift constitutes a transfer of ownership triggering uncapping
Under Michigan law, a transfer of ownership — including a gift — generally triggers the uncapping of the taxable value, causing it to reset to the SEV. In this case, the taxable value would reset from $95,000 to the SEV of $200,000. While Michigan law does provide certain exemptions from uncapping (such as transfers between spouses or to certain qualifying relatives who will use the property as their principal residence under specific conditions), a simple gift to an adult child does not automatically qualify for an uncapping exemption unless the specific statutory requirements are met. Agents must advise clients to consult a tax professional about such transfers.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Continuing education (CE) refers to the ongoing coursework that licensed real estate professionals must complete during each renewal cycle to maintain an active license. CE ensures agents stay current with changes in laws, regulations, and industry practices.
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
Brokers in Florida have strict responsibilities for managing escrow accounts, including monthly reconciliation and proper handling of trust funds.
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