In a unanimous decision, a panel of the Michigan Court of Appeals ruled that a municipality is barred from uncapping the taxable value of a property in future years, so long as the transferee properly filed a Property Transfer Affidavit in the year of transfer.
In Michigan Properties, LLC v Meridian Township, the Michigan Court of Appeals ruled that Meridian Township was barred from retroactively uncapping the taxable value of a parcel in 2007 for a transfer alleged to have occurred in 2004, when the Township had failed to uncap the taxable value in 2005 and 2006. The court ruled that, unlike the circumstance that exists when one fails to file a Property Transfer Affidavit, a community is barred from retroactively uncapping the taxable value when a Property Transfer Affidavit is filed.
The court left open the possibility that the March 2005 Board of Review may have had authority to correct the tax roll and uncap the taxable value, had the assessor failed to do so after the 2004 transfer. However, once the March Board of Review is closed, the community loses the ability to uncap the taxable value for a transfer occurring in the prior calendar year, so long as a Property Transfer Affidavit was filed. Thus, reason No. 101 why you should file a property transfer affidavit, even if you are claiming an exemption from uncapping.
If you have questions about an assessor’s attempt to retroactively uncap your taxable value, or you wish to discuss structuring a transaction to minimize its property tax impact, please contact David Nykanen at Demorest Law Firm.
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