If you are using a Michigan quitclaim deed for a family transfer, spouse transfer, trust transfer, divorce-related transfer, inheritance matter, or estate-planning update, you may be wondering whether Michigan transfer tax applies.
That is a very reasonable concern. Many quitclaim deeds are not traditional sales. They are often used to update ownership records between people who already have a family, trust, estate, or personal relationship.
The important point is this: a Michigan quitclaim deed is not automatically tax-free, but most common quitclaim deed situations should be reviewed for possible transfer tax exemption treatment before assuming tax is due.
Important Michigan Exemption Note:
Michigan has both state transfer tax and county transfer tax rules.
State transfer tax exemptions are listed in MCL 207.526. County transfer tax exemptions are listed in MCL 207.505.
If an exemption applies, Michigan recording offices generally expect the exemption to be stated on the face of the deed or recording instrument.
In plain English, you usually do not just leave the tax unpaid and hope the recorder figures it out. You identify the exemption as part of the recording package.
Transfer tax exemption and the Property Transfer Affidavit are separate issues.
Does a Quitclaim Deed Automatically Avoid Michigan Transfer Tax?
No. A quitclaim deed does not automatically avoid Michigan transfer tax.
Michigan looks at the actual transfer. If the deed transfers property for taxable value or consideration, transfer tax may apply. If the deed fits an exemption, tax may not be due.
See a simple example.
What Taxes Are We Talking About?
Michigan transfer tax usually has two parts:
- State Transfer Tax under Michigan state law
- County Transfer Tax collected at the county recording level
The exemption may need to address one or both taxes depending on the transfer.
Some exemptions are similar between state and county law, but they should still be checked separately.
Common Michigan Exemption Situations
Michigan law lists several transfer tax exemptions. Common quitclaim deed situations that may raise exemption questions include:
- transfers where the value of consideration is less than $100
- certain transfers involving government entities
- certain transfers to confirm, correct, modify, or supplement a previously recorded instrument
- certain transfers between spouses
- certain transfers because of divorce or property settlement
- certain transfers to a child, stepchild, or adopted child
- certain transfers involving a court order or judgment where no consideration is paid
- certain transfers from an estate to a beneficiary or distributee
- certain transfers involving foreclosure or deeds in lieu of foreclosure
- certain trust, entity, or business-related transfers depending on the facts
Important:
This is a plain-English summary, not the full statutory list. The exemption must match the actual transfer and should be checked against the official Michigan law before recording.
Family Transfers
Many Michigan quitclaim deeds are used for family transfers.
A family transfer may qualify for exemption treatment, but the exact relationship matters.
For example, Michigan Treasury guidance explains that a transfer from a grantor to the grantor’s child, including stepchild or adopted child, and that child’s spouse can qualify under the state transfer tax exemption. It also explains that a transfer to a son-in-law or daughter-in-law alone is not the same thing.
See a parent-to-child example.
Spouse and Divorce Transfers
Quitclaim deeds are often used when spouses are adding, removing, or dividing ownership.
Certain transfers between spouses or former spouses may qualify for exemption treatment, especially when the transfer is connected with divorce or a property settlement.
See a divorce transfer example.
Estate and Inheritance Transfers
Michigan transfer tax exemptions can also matter when property moves from an estate to beneficiaries or heirs.
Michigan Treasury guidance explains that a personal representative transferring real property without consideration to a beneficiary or distributee under a will or intestacy can be exempt under the state transfer tax law.
See an estate transfer example.
Corrective and Confirmatory Deeds
Sometimes a quitclaim deed is used to fix a mistake or clarify a prior deed.
If the deed only corrects, confirms, modifies, or supplements a prior recorded instrument and does not transfer new value, exemption treatment may be available.
See a corrective deed example.
How Do You Claim a Michigan Transfer Tax Exemption?
This is the part many visitors really want to know.
In Michigan, exemptions are generally claimed as part of the deed recording process. The exemption should usually be stated on the face of the deed or recording instrument.
Some county Register of Deeds offices specifically state that transfer tax is collected unless the deed is exempt and the exemption is stated on the face of the deed.
Simple example wording:
Exempt from Michigan state transfer tax under MCL 207.526(__) and county transfer tax under MCL 207.505(__).
The letters in parentheses should match the actual exemption being claimed. Do not use a statute citation unless it accurately fits the transfer.
Is There a Separate Exemption Form?
For ordinary deed recording, Michigan transfer tax exemptions are usually handled by stating the exemption on the deed or recording instrument.
If the total consideration is not stated on the deed, some situations may involve a Real Estate Transfer Valuation Affidavit.
Michigan Treasury guidance also notes that for certain principal residence transfer tax exemptions, specifying the exemption on the face of the deed may be accepted, although the claim may be subject to audit or review.
Who Reviews the Exemption?
The county Register of Deeds reviews the deed when it is presented for recording.
The recorder does not decide every legal question for you, but the recording office may reject a deed, collect tax, or ask for correction if the exemption is missing, unclear, or not stated properly.
The claim may also be subject to later audit or review in some situations.
What Happens If the Exemption Is Not Accepted?
If the exemption is not accepted, the deed may be delayed or transfer tax may need to be paid before recording.
The Register of Deeds may ask for clearer exemption wording, a corrected document, or supporting information.
This is why it is better to identify the correct exemption before signing and submitting the deed.
Do Recording Fees Still Apply?
Yes. A transfer tax exemption does not automatically eliminate ordinary recording fees.
Recording fees, transfer tax, valuation affidavits, and the Property Transfer Affidavit are separate issues.
Does the Property Transfer Affidavit Still Apply?
Often, yes.
A deed can be exempt from transfer tax and still require the Michigan Property Transfer Affidavit to be filed with the local assessor.
That is one of the most common points of confusion. Recording the deed, claiming a transfer tax exemption, and filing the assessor affidavit are separate parts of the process.
Official Michigan Sources
These sources are useful for reviewing Michigan state and county transfer tax exemptions:
Common Michigan Transfer Tax Exemption Mistakes
- Assuming every quitclaim deed is automatically exempt
- Failing to state the exemption on the face of the deed
- Using the wrong MCL citation or exemption letter
- Assuming a family transfer always qualifies without checking the relationship
- Confusing state transfer tax exemptions with county transfer tax exemptions
- Forgetting that recording fees may still apply
- Assuming a transfer tax exemption eliminates the Property Transfer Affidavit requirement
- Using $1.00 consideration without understanding how the transfer will be reviewed
- Waiting until recording day to figure out the exemption wording
Michigan Transfer Tax Exemptions FAQ
Are Michigan quitclaim deeds automatically exempt from transfer tax?
No. A quitclaim deed is not automatically exempt. The exemption depends on the actual transfer and whether it fits Michigan state or county exemption rules.
How do I claim a Michigan transfer tax exemption?
The exemption is generally claimed by stating the applicable exemption on the face of the deed or recording instrument, often with the correct MCL citation and exemption letter.
Does Michigan have state and county exemptions?
Yes. State transfer tax exemptions are listed in MCL 207.526, while county transfer tax exemptions are listed in MCL 207.505.
Do I still need to file the Property Transfer Affidavit if transfer tax is exempt?
Often yes. The Property Transfer Affidavit is separate from transfer tax and is generally filed with the local assessor after many real property transfers.
Is this legal advice?
No. This page provides general educational information and is not legal advice.