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State Real Estate Transfer Tax (SRETT)

State Real Estate Transfer Tax (SRETT)

What is the State Real Estate Transfer Tax (SRETT)?

The State Real Estate Transfer Tax (SRETT) is a Michigan tax on the sale or transfer of an interest in real property, such as land, a home, or a building. It applies when ownership is transferred by a written instrument, most commonly a deed, that is recorded with the county Register of Deeds. The tax is established by the State Real Estate Transfer Tax Act, 1993 PA 330 (MCL 207.521 et seq.), and is administered by the Michigan Department of Treasury.

The seller (grantor) is legally responsible for paying SRETT. It is paid through the county when the deed is recorded. Some buyers and sellers agree that the buyer will pay on the seller’s behalf.

To request a refund of SRETT, file Form 2796, Application for State Real Estate Transfer Tax (SRETT) Refund, with the Michigan Department of Treasury.

 

SRETT at a glance

What is taxed Transfers of real property interests by deed or other recorded written instrument
State rate $3.75 for each $500, or fraction of $500, of the total value of the property (MCL 207.525)
Who pays The seller or grantor
When and where At recording, through the county Register of Deeds and County Treasurer
Refunds Available if the transfer was exempt from SRETT
Refund form Form 2796, Application for State Real Estate Transfer Tax (SRETT) Refund
Questions Treasury Special Taxes Division, Miscellaneous Taxes and Fees Unit: 517-636-0515 (TTY via 711)


Processing time: Please allow 6 to 8 weeks after submitting Form 2796 before calling to check the status of your State Real Estate Transfer Tax (SRETT) refund.

 

Important Links for the State Real Estate Transfer Tax

Form 2796: Application for State Real Estate Transfer Tax (SRETT) Refund

The form sellers, or buyers who paid on the seller's behalf, use to ask Treasury to refund SRETT paid on an exempt transfer. Includes the list of exemptions and mailing instructions. File it within four years and 15 days of the sale.

Documents Required for SRETT Refunds Under the Principal Residence Exemption (u)

Treasury notice (February 2017, updated July 2018) explaining what to submit with Form 2796 when claiming a refund because the property was the seller's principal residence. It requires a final signed settlement statement, HUD-1, or Closing Disclosure showing you paid the SRETT. If you can't find it, contact your escrow agent, title company, or attorney.

SRETT Frequently Asked Questions (2015)

Treasury's question-and-answer guide to the State Real Estate Transfer Tax. Covers when the tax applies and which transfers are exempt, including family transfers, estates and trusts, land contracts, foreclosures, bankruptcy, and nonprofit and government sellers.

Notice: SRETT Refunds for Transfers Since June 24, 2011 (Gardner Decision)

Treasury notice (issued 2016, updated 2018) on refunds of SRETT for principal residence sales after the Michigan Supreme Court's Gardner v Department of Treasury decision. It sets out the three requirements for the exemption. The notice says it is no longer correct on refund eligibility without regard to the statute of limitations, because 2018 PA 172 changed that.

State Real Estate Transfer Tax Forms and Instructions

Treasury's forms page for SRETT. Lists Form 2796, the SRETT refund application, and links to information on easements, conveyances, and real estate transfer tax.

Frequently asked questions about State Real Estate Transfer Tax
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What is Form 2796?

Form 2796 is the Application for State Real Estate Transfer Tax (SRETT) Refund. Sellers, or buyers who paid SRETT on the seller’s behalf, use it to ask Treasury to refund SRETT paid on a transfer that qualified for an exemption.

 

Which form do I use to request an SRETT refund?

Use Form 2796, Application for State Real Estate Transfer Tax (SRETT) Refund.

 

Where do I get Form 2796?

Download it from this page or from the State Real Estate Transfer Forms page, or search for “2796” in Treasury’s Tax Form Search.

 

What documents do I need to submit with Form 2796?

For a principal residence exemption claim (MCL 207.526(u)), attach proof SRETT was paid, the final settlement statement, proof of the purchase date, and proof of SEV at purchase and in the year of sale. See the steps above for details.

 

What is the deadline to file Form 2796?

Four years and 15 days from the date of the sale or transfer.

 

Where do I send Form 2796?

Send to:

Michigan Department of Treasury
Special Taxes Division, Miscellaneous Taxes and Fees/SRETT
PO Box 30781
Lansing, MI 48909

Or fax: 517-636-4593

 

Who pays SRETT, the buyer or the seller?

The seller is legally liable for SRETT under 1993 PA 330. Only the seller (or a buyer who paid on the seller’s behalf) may request a refund.

 

Is SRETT owed on a land contract?

The tax is due when the land contract is paid off and the deed is delivered, not when the contract is signed. If the tax was paid early, the final deed should reference the original payment so it is not taxed twice.

 

Is property inherited from an estate subject to SRETT?

A personal representative transferring property to a beneficiary for no consideration is exempt. A sale by the estate, including a sale to the decedent’s child, is taxable unless the consideration is under $100.

 

Are transfers to or from a trust taxable?

A transfer into a trust or out to a beneficiary for no consideration is exempt under MCL 207.526(a). A sale from a trust for more than $100 is taxable.

 

Does SRETT apply to bankruptcy or receivership sales?

A sale by a bankruptcy trustee or receiver is taxable, except sales under a confirmed Chapter 11 or Chapter 12 plan. Conveyances to a receiver or trustee are exempt.

 

Are transfers by nonprofits, churches, or private schools exempt?

No. Exemption from property tax does not make a conveyance exempt from SRETT. Conveyances by public schools and universities and by governments are exempt.

 

What date does SRETT use for a transfer?

The date on the deed, or the acknowledgment date if acknowledged, unless evidence shows the deed was delivered later.