In Michigan, both the buyer and seller pay a transfer tax when real estate changes hands — but the split is not equal, and the rules about who pays what are specific. This guide explains exactly how Michigan’s transfer tax works, the current rates, who is responsible for paying, and the exemptions that can reduce or eliminate your tax bill.
Michigan Transfer Tax Rates (2026)
| Tax | Rate | Who Pays |
|---|---|---|
| State transfer tax | $3.75 per $500 (0.75%) | Seller |
| County transfer tax | $0.55 per $500 (0.11%) | Seller |
| Total standard rate | $4.30 per $500 (0.86%) | Seller |
The combined Michigan transfer tax rate is $4.30 per $500 of sale price, or approximately 0.86% of the total sale. This is paid by the seller at closing in the vast majority of transactions.
Real Example: Transfer Tax on a $250,000 Michigan Home
| Tax Component | Calculation | Amount |
|---|---|---|
| State transfer tax | ($250,000 ÷ $500) × $3.75 | $1,875 |
| County transfer tax | ($250,000 ÷ $500) × $0.55 | $275 |
| Total transfer tax | $2,150 |
Use our Michigan transfer tax calculator for any sale price instantly.
Who Pays Michigan Transfer Tax — Buyer or Seller?
In Michigan, the seller pays the transfer tax by default. This is standard practice in the vast majority of Michigan real estate transactions. However, in a buyer’s market or as part of a negotiated deal, sellers sometimes ask buyers to cover part or all of the transfer tax as a concession.
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At closing, the transfer tax is typically collected by the title company or closing attorney and remitted to the state and county on the seller’s behalf.
Michigan Transfer Tax Exemptions
Several types of transfers are exempt from Michigan transfer tax:
- Transfers between spouses or to a surviving spouse
- Transfers to a parent, child, or grandparent with no or nominal consideration
- Transfers by court order (divorce decrees, foreclosures)
- Transfers to a government entity
- First-time home buyers: Michigan offers a state transfer tax refund (not full exemption) to buyers who purchase a principal residence and have not owned a home in the past 3 years
Michigan First-Time Buyer Transfer Tax Refund
If you are a first-time buyer (no home ownership in the prior 3 years) purchasing a principal residence, you can apply for a refund of the state portion ($3.75 per $500) of the transfer tax after closing. The county portion ($0.55 per $500) is not refundable. File Form 2796 with the Michigan Department of Treasury within 4 years of the date of transfer.
Frequently Asked Questions
What is the Michigan real estate transfer tax rate?
Michigan charges $3.75 per $500 in state transfer tax plus $0.55 per $500 in county transfer tax, for a combined rate of $4.30 per $500 (0.86%) of the sale price. The seller pays this at closing.
Can a buyer pay the Michigan transfer tax?
By law the seller is responsible, but buyer and seller can negotiate to have the buyer cover part or all of the tax as part of the purchase agreement. This is not standard but is allowed.