G
ood news coming out of Lansing for real estate owners wishing to transfer their home and/or real property to a spouse or child. On December 31, 2012, Governor Rick Snyder signed enrolled House Bill No. 4753 which amends the General Property Tax Act of 1893 (Public Act 206), to allow property transferred to a person related by blood or affinity to the first degree to retain its current taxable value. The newly revised law will allow real estate property owners to avoid the property tax re-valuation, known as the “pop-up tax,” previously in effect when real property was transferred from one spouse to another or by a decedent to a surviving spouse. A first degree blood relation would include the spouse and children, and a first degree affinity would include stepchildren.
Under the old law, when a piece of real estate is transferred to a new owner (including family members), the taxable value generally “uncaps” to the true value of the property. Once you own a piece of real estate the taxable value cannot increase from one year to the next by more than 5% or the rate of inflation, whichever is less, until that real estate is transferred to a new owner. The new law will make transferring a cottage or lakefront home, for example, more affordable for the close family recipients of the real property by maintaining property tax assessments at the lower levels “enjoyed” by the previous homeowner.
To read the entire amendment to Public Act 206, click here…
