Here's an excerpt:
"An exemption from the requirement imposed by the State Real Estate Transfer Tax Act, MCL 207.521 et seq, to pay state real estate transfer taxes upon the transfer or sale of real property may be claimed under MCL 207.526(t) if, on the date a parcel occupied as a principal residence is transferred, its state equalized value is less than or equal to its state equalized value on the date the owner purchased or acquired the parcel and the property is sold for not more than its true cash value at the time of sale."
You can read the opinion letter for yourself by clicking here.
To summarize, a seller may be exempt from paying the state transfer tax if:
The property sold is their primary residence.
The sales price is less than twice the current SEV.
The SEV on the sale date is less than or equal to the SEV when the seller bought the property.
Here are three examples from the opinion:
EXAMPLE 1:
SEV when acquired in 2006 = $74,000.00.
SEV when transferred in 2008 = $72,000.00.
TCV in 2008 = $144,000.00.
Transfer or sale price in 2008 = $140,000.00.
OUTCOME: This transfer qualifies for exemption from the state real estate transfer tax because the SEV for 2008, the year of sale, is less than the SEV for 2006, the year of acquisition, and the sale price does not exceed the true cash value.
EXAMPLE 2:
SEV when acquired in 2006 = $74,000.00.
SEV when transferred in 2008 = $72,000.00.
TCV in 2008 = $144,000.00.
Transfer or sale price in 2008 = $148,000.00.
OUTCOME: This transfer is not exempt under MCL 207.526(t) because the sale price exceeds the true cash value for 2008, the year of sale.
EXAMPLE 3:
SEV when acquired in 2006 = $74,000.
SEV when sold in 2008 = $75,000.
OUTCOME: This transfer, regardless of the sale price, is not exempt under MCL 207.526(t) because the SEV for 2008, the year of sale, exceeds the SEV for 2006, the year of acquisition.
It's important to note that this exemption does not cover the county transfer tax.
Also, it's advised that a seller consult with an experienced real estate attorney.
It would be interesting if Realcomp (MLS service provider) could/would analyze 2009 sales for the tri-county area to determine the percentage of home sales that qualified for this exemption. I'm sure a high percentage of short sales did.
I'm also sure those in Lansing running the budget numbers haven't taken this potential loss of revenue into account.
The question is - how many real estate agents are letting their clients know about this?
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About the Author:
In addition to real estate lending, consulting and investing, Drew Sygit writes & speaks about the mortgage & real estate industries. He holds mortgage industry designations CMPS, CMC, CRMS, CMLO, CALO, has an MBA and is an approved industry instructor. He's presented, spoken and/or written for HUD, Financial Planning Association, Financial Planners Association of Michigan, Michigan Association of CPA's, Institute of Continuing Legal Education, Oakland Real Estate Investors Association, North Oakland County Board of Realtors and numerous industry publications. For speaking engagements and questions he can be reached at dsygit@TheLendingEdge.com. He also publishes his own blog: http://DrewsMortgageNews.com & has a FaceBook FanPage: www.FaceBook.com/TheLendingEdge.
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The Hyderabad property market is fast becoming a buyers' paradise. Catering to demand across categories, there are options in both the affordable as well as the luxury categories. There has been a price correction in the market with prevailing values at least 10 per cent lower than during peak times.
As the real estate market across the country revived, Hyderabad's buyers are also in a better situation today. With demand matching supply the market is gaining momentum. Also worth commenting is a trend by developers such as Aparna Constructions which are offering a unique proposition to buyers - Buy at today's prices, but if prices drop tomorrow, you only need to pay tomorrow's prices. Price protection has been a consistent demand from buyers since the turmoil of 2009.
The Hyderabad city, currently, is experiencing housing demand across categories i.e. multi-storey apartments, independent residential houses and villas. The supply side is also robust with options in all segments - affordable homes, premium housing and luxury housing.
Many developers such as Ramky Estates, SMR Holding, Indu Projects Limited, Aparna Infrahousing Private Limited,K Raheja Corp from Mumbai, Radha Reality, Babu Khan Properties have launched their projects in the city - each catering to a different target audience. These include residential apartments, villas and row houses as stand-alone projects or within townships.
Most of the newly launched properties are in the Rs 25-50 lakh category, typically what fits into the affordable housing segment. These are in the 1, 2 and 3 bedrooms apartment category. A few villas in the Rs 39-46 lakh category are also available. The projects are mainly coming up on the outskirts of the city.
Affordable homes in Hyderabad are available in the price bracket of Rs 1800 to Rs 4000 per sq ft. There are premium housing projects available in the city,priced between Rs 54 lakh to 5 crores.All these are luxury villas in projects equipped with round-the-clock security mechanisms and video phones, club houses with recreational and sports facilities such as swimming pools, gymnasium, meditation centres, health clubs, special playing areas for kids with skating rinks, tennis and badminton courts, open parks and most importantly, ample parking space.These projects are coming at Warangal, Kukatpally, Kompally and Nagole.
According to the current Brix Research Value Analysis Report,available at the fair,the property market of Hyderabad stabilised during the Oct-Dec 2009 period as compared to Apr-Sep 2009 period. Residential values dropped in Jan-Mar 2009 period owing to recession. The market recovered and witnessed growth in values during the Apr-Jun 2009 period. However, the values stabilised in the Jul-Dec 2009 period and there are many residential options available in the affordable price bracket. So this is an ideal time to make investment in the real estate sector. The Value Analysis Report, Issue-4 gives detailed analysis of residential and commercial property market of Hyderabad during the Oct-Dec 2009 period and the quarterly variations from the Jul-Sep 2009 period.
The reviving market has resulted in increase in property prices in Hyderabad.With low interest rates and many projects nearing completion, it is a good time to invest in properties. Remember to check the track record of the builders and the current values against other such projects before you decide. Buy what you need, where you need and if you need it today, the best time to buy is now.
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About the Author:
Here are I am writing this article in behalf of Real Estate India. This article gives you an idea about Hyderabad Property investment.
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