Michigan Transfer Tax: Rates, Who Pays, and How to Calculate It

Michigan levies a documentary transfer tax every time a property deed is recorded. It's split into two separate components — state and county — and the rates are oddly specific. If you're buying or selling a home in Michigan, here's exactly how the math works, who pays it, and when you might be exempt.

The Two-Part Michigan Transfer Tax Structure

Michigan's transfer tax operates on a tiered basis with two entirely separate levies:

State Real Estate Transfer Tax (SRETT): $3.75 per $500 of the property's sale price (or fraction thereof).

County Real Estate Transfer Tax: $0.55 per $500 of the sale price in most counties.

Combined, the aggregate rate is $4.30 per $500, or $8.60 per $1,000 of the final sale price. Both taxes are calculated on the total consideration — meaning the full price stated in the purchase agreement, not the loan amount.

Transfer Tax Calculator: What You'll Pay at Common Price Points

The calculation rounds up each $500 increment, so a $201,000 sale is taxed on $201,500 (rounding up to the next $500 bracket), not $201,000.

Note on Wayne County: Michigan law allows counties with populations over two million to charge up to $0.75/$500 for the county portion. Wayne County currently applies the standard $0.55/$500 rate, not the elevated rate.

Who Pays the Michigan Transfer Tax?

By statute and longstanding custom: the seller pays both the state and county transfer taxes. The legal obligation falls on the grantor (seller) at the time the deed is recorded at the county Register of Deeds.

This shows up on the seller's closing disclosure as a deduction from their proceeds, not as a buyer expense.

However, it is negotiable. In competitive bidding wars — common in Ann Arbor, the Detroit suburbs, and Grand Rapids — buyers sometimes offer to pay the seller's transfer tax as a way to make their offer more attractive without raising the purchase price. Because the transfer tax doesn't affect the purchase price, this concession doesn't inflate the appraisal or the loan amount. A $1,720 seller concession on a $200,000 home is a genuine financial advantage to the seller with no loan risk to the buyer.

If you're the buyer and you're considering this, make sure your lender knows — it affects the closing disclosure, but it's a legitimate negotiating tool in a multiple-offer situation.

Exemptions: When Is Transfer Tax Not Owed?

Michigan law provides several exemptions from the state transfer tax specifically. The most relevant for regular buyers and sellers:

Principal Residence Exemption (SRETT only): If a seller conveys their principal residence for a price less than their original purchase price — meaning they're selling at a loss — the transaction is exempt from the state's $3.75/$500 levy. The county tax remains owed regardless. This exemption primarily benefits sellers in distressed markets who bought high and are now selling below their purchase price.

Family transfers: Transfers between certain family members — parents to children, spouses, siblings — may qualify for transfer tax exemption depending on the circumstances and consideration paid.

Government transfers, foreclosures, and certain court-ordered transfers are also exempt.

The exemptions for the state portion are filed at the time of deed recording. If no exemption applies, the tax is collected by the county Register of Deeds at recording.

How It Appears on Your Closing Documents

If you're the buyer, Michigan transfer taxes won't appear as a line item you're paying — they show on the seller's side of the ALTA settlement statement. You'll typically see them listed as:

• "State real estate transfer tax" — seller's column
• "County real estate transfer tax" — seller's column

If you negotiated to pay the seller's transfer taxes as a buyer concession, they appear in your column instead.

This is a common point of confusion when buyers review the closing disclosure for the first time. The form shows all parties' costs, and Michigan's specific line items can look unfamiliar to anyone accustomed to other states' closing structures.

Transfer Tax vs. Recording Fees

These are separate costs. Recording fees are paid to the county Register of Deeds to formally enter the deed and mortgage into the public record — typically $30–$100 for buyers, covering the mortgage recording. Transfer taxes are calculated on the sale price and are a much larger expense for sellers.

Both are collected at the same time (deed recording), which is why they sometimes get conflated. The recording fee is nominal; the transfer tax is meaningful.

Michigan Transfer Tax and the Principal Residence Exemption: A Seller's Note

There's a distinct "Principal Residence Exemption" as it applies to transfer taxes — separate from the PRE used for annual property tax bills. Under MCL 207.526(u), the state transfer tax is waived when a seller conveys their primary residence for a sale price below their original purchase price. This applies when the seller takes a loss on the sale — meaning the consideration paid is less than the consideration originally paid when they acquired the property.

This exemption only removes the state portion ($3.75/$500). The county tax ($0.55/$500) remains due regardless of whether the seller sold at a loss.

For buyers, this is mostly informational: if you're purchasing a distressed property where the seller paid more than the current sale price, the transaction may generate fewer transfer tax line items on the seller's side of the closing disclosure. It doesn't affect what you pay.

How Transfer Tax Interacts with Investor and Cash-Offer Strategies

In Michigan's competitive markets — particularly around Ann Arbor, Grand Rapids, and Macomb County suburbs — some buyer strategies involve offering to pay the seller's transfer taxes as a non-price concession. This makes the offer more valuable to the seller without inflating the purchase price (which affects the appraisal and loan amount).

Example: A buyer and seller are at $250,000. The buyer offers to absorb the $2,150 in transfer taxes. The purchase price stays at $250,000, so the appraisal isn't affected, but the seller nets an extra $2,150 at closing. For an offer competing against cash buyers or waived-contingency offers, this concession costs the buyer $2,150 in closing-side cash but can be the differentiating factor in a multiple-offer scenario.

Know whether this is on the table before entering a bidding war. Your agent should know current market conventions in your specific area.

Quick-Reference: Michigan Transfer Tax Formula

If you want to calculate transfer tax for any price point:

1. Take the sale price and divide by 500
2. Round up to the nearest whole number
3. Multiply by $3.75 for the state tax
4. Multiply the same rounded number by $0.55 for the county tax
5. Add both for the total

Example for $225,000: $225,000 ÷ 500 = 450 exactly. State: 450 × $3.75 = $1,687.50. County: 450 × $0.55 = $247.50. Total: $1,935.

Example for $226,000: $226,000 ÷ 500 = 452 (round up from 451.2 + ... actually 226,000/500 = 452.0 exactly). State: 452 × $3.75 = $1,695. County: 452 × $0.55 = $248.60. Total: $1,943.60.

The "round up to nearest $500" rule applies to each individual $500 increment.

For a full breakdown of all Michigan closing costs — including how transfer taxes fit into the total cash-to-close picture alongside title fees, appraisal, escrow setup, and the property tax proration — the Michigan First-Time Home Buyer Guide covers every line item with real examples.

See more Michigan guides →