By Judy Layne
If you own a family cottage or other residential real estate located in Michigan in a limited liability company, you may want to remove the cottage from the limited liability company in order to take advantage of a relatively new exemption from Michigan’s uncapping statute. If title to Michigan residential real estate passes from parent to child or grandchildren, either by lifetime gift, testamentary transfer or trust, the property should not be subject to uncapping and the real property taxes on the residence should not increase significantly. Conversely, if the residence is held by a limited liability company, when a majority of the membership interest in the limited liability company changes hands, the taxable value of the property will be uncapped.
For more information on how to avoid uncapping on the transfer of residential real estate in Michigan, please contact Judy Layne in our Troy, Mich. office at 248-433-7563.