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Any real estate experts in the house? UPDATED 3/7/25 (1 Viewer)

playin4beer

Footballguy
Michigan

After living in our house for almost 30 years, we recently (November) had the opportunity to buy my parents house, on a lake. One of the big benefits (or so we thought) of buying my parents house was that the taxes wouldn't get uncapped. They've been in their house for almost 20 years and our taxes were pretty close to the same. Fast forward to this week and our tax assessment comes in and our taxable value went thru the roof. I called on it and because me AND my wife are on the deed, they can uncap 50%. They said for it to stay capped, it would have had to be just in my name. And then I could have added her to it without it being uncapped because she's my wife. But it can't go from my parents to "us". Anybody have any insight on this?? Is it possible to have a "corrected deed" done in just my name? or has that ship sailed?

UPDATE:
I had taken my case to our local Township for the Board of Review to argue my case in 2024.. They said they were unfamiliar with the law and directed me to file with the Michigan Tax Tribunal for a hearing, which I did. In the meantime, I had been doing a ton of research on the subject and my argument was, in the State of Michigan, partial uncapping of taxes cannot be done in the case of a joint entity, which my wife and are. But it never specifically said "spouse" anywhere in the law, leaving it open to interpretation. Fast forward to today and I finally had an email saying a judge has been assigned to my case and I have a phone hearing May 27th and to submit any documents for my case 21 days in advance. So I go back to michigan.gov to get what I need for my case and they have added another entry to the law pertaining to "transfer of ownership".. It now states:

Is a transfer of property from a parent to a child and their spouse a transfer of ownership? Beginning in 2025, the Commission will offer the following guidance for current and future application. No. When a deed is conveyed to a husband and wife, the property is held as a tenancy by the entirety unless the deed expressly provides otherwise. In a tenancy by the entirety, the husband and wife are considered one person in the law, each would own an undivided share in the subject of the property with a right of survivorship. If the property conveyed was classified as residential real and if the use of the real property does not change following the transfer of ownership, this would be an exempt conveyance under MCL 211.27a(7)(u).

Short version:

I was right.
 
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Not an expert, but hard for me to see how you could go back on the deed. Maybe you could find something in the agreement that could be grounds for voiding the sale.

I do find it a strange law that a spouse would negate the rights of transfer in this situation. I would consult an attorney. Depending on who you talked to in the assessment office, they may not know all the facts.
 
This one is very state specific. My MIL wanted to put Mr R on her house deed. A big no. We would only get a homestead exemption on our house, so we'd have to pay the full rate on "his" half. And it wouldn't even affect probate.
 
Michigan

After living in our house for almost 30 years, we recently (November) had the opportunity to buy my parents house, on a lake. One of the big benefits (or so we thought) of buying my parents house was that the taxes wouldn't get uncapped. They've been in their house for almost 20 years and our taxes were pretty close to the same. Fast forward to this week and our tax assessment comes in and our taxable value went thru the roof. I called on it and because me AND my wife are on the deed, they can uncap 50%. They said for it to stay capped, it would have had to be just in my name. And then I could have added her to it without it being uncapped because she's my wife. But it can't go from my parents to "us". Anybody have any insight on this?? Is it possible to have a "corrected deed" done in just my name? or has that ship sailed?
I think you are looking for the info about halfway down the page "Uncapping Michigan Property Taxes". You may need to find an attorney to fix this one.
 
They said for it to stay capped, it would have had to be just in my name. And then I could have added her to it without it being uncapped because she's my wife. But it can't go from my parents to "us".
The "first degree relative" part seems to apply here.
That was my argument.. The tax assessor said they interpret "Affinity in the first degree" to apply to me and my wife, not my wife and my parents. They said, "It's the way we've always done it, if you can show us something that says otherwise, we'll consider changing it".
 
They said for it to stay capped, it would have had to be just in my name. And then I could have added her to it without it being uncapped because she's my wife. But it can't go from my parents to "us".
The "first degree relative" part seems to apply here.
That was my argument.. The tax assessor said they interpret "Affinity in the first degree" to apply to me and my wife, not my wife and my parents. They said, "It's the way we've always done it, if you can show us something that says otherwise, we'll consider changing it".
It's not transitive as far as I can tell. Your parents could add you. You could then add your spouse. But it has to chain like that, I think.
 
They said for it to stay capped, it would have had to be just in my name. And then I could have added her to it without it being uncapped because she's my wife. But it can't go from my parents to "us".
The "first degree relative" part seems to apply here.
That was my argument.. The tax assessor said they interpret "Affinity in the first degree" to apply to me and my wife, not my wife and my parents. They said, "It's the way we've always done it, if you can show us something that says otherwise, we'll consider changing it".
It's not transitive as far as I can tell. Your parents could add you. You could then add your spouse. But it has to chain like that, I think.
That's what they are telling me.. which makes no sense to me. They can add me, I can add her, but it can't go to the both of us?
 
I am an appraiser for a CA county assessor's office. Look into recording a rescission deed.

The laws are written to be very specific. It's to protect the community as a whole, to ensure that everyone is taxed fairly and equitably. We have many instances each year where a legal entity (LLC, trust, LP, etc.) will transfer its property (many times with an assessed value in the tens of millions) to the same legal entity (in name) trying to circumvent a tax increase, but it still gets re-assessed at market value because the members (and/or their ownership percentages) change.

I am not familiar with tax law in Michigan, but in CA, in order for a tax basis to transfer inter-generationally (Prop 19), your parents would have to transfer their property to you, and within a year you would have to file a homeowners exemption (a decrease of $7,000 in assessed value - not taxes owed) claiming the new property as your primary residence. There is no "policing" of this requirement, it's a situation where one is checking the right boxes to make it work.
 
I’m not an attorney, but from personal experience, navigating tax assessments and property deeds can get complicated depending on state laws. I bought a rental property a few years ago and had to dig into all kinds of tax implications, but it got overwhelming quickly. I worked closely with a tax consultant, saving me many headaches and cash in the long run.

For complex situations like yours, it might help to reach out to these guys who specialize in cost segregation and maximizing tax savings for property owners. They can provide some guidance or point you in the right direction.
 
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I am an appraiser for a CA county assessor's office. Look into recording a rescission deed.

The laws are written to be very specific. It's to protect the community as a whole, to ensure that everyone is taxed fairly and equitably. We have many instances each year where a legal entity (LLC, trust, LP, etc.) will transfer its property (many times with an assessed value in the tens of millions) to the same legal entity (in name) trying to circumvent a tax increase, but it still gets re-assessed at market value because the members (and/or their ownership percentages) change.

I am not familiar with tax law in Michigan, but in CA, in order for a tax basis to transfer inter-generationally (Prop 19), your parents would have to transfer their property to you, and within a year you would have to file a homeowners exemption (a decrease of $7,000 in assessed value - not taxes owed) claiming the new property as your primary residence. There is no "policing" of this requirement, it's a situation where one is checking the right boxes to make it work.
What county? I'm in Ventura. Just moved from residential to C&I.
 
Very noice. Should be a slam dunk case now.
I would think so, but I emailed the tax assessor the new information and asked if they could just drop the case and not have it go to the Tax Tribunal.

Her response:

"I spoke to my director about this and since this is a 2025 decision and change, the assessing department does not have the authority to change this 2024 partial uncapping from a 2023 transfer. Unfortunately, we will have to proceed to the Tribunal"

:wall: :wall: :wall:
 
Very noice. Should be a slam dunk case now.
I would think so, but I emailed the tax assessor the new information and asked if they could just drop the case and not have it go to the Tax Tribunal.

Her response:

"I spoke to my director about this and since this is a 2025 decision and change, the assessing department does not have the authority to change this 2024 partial uncapping from a 2023 transfer. Unfortunately, we will have to proceed to the Tribunal"

:wall: :wall: :wall:
Take it to DOGE.
 

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