Costs of Selling Land in Michigan
Here is what a land seller usually pays in this state, from transfer tax to capital gains. When you sell to us, we pay the closing costs and you pay no fees or commissions.
- Cash offer in 24 hours
- No fees or commissions
- We pay closing costs
- Close in as few as 7 days
Seller Costs in Michigan at a Glance
| Cost | Typical amount | Who usually pays |
|---|---|---|
| State real estate transfer tax | $3.75 for each $500 of value or part of $500 | Seller (Michigan law puts it on the seller or grantor) |
| County real estate transfer tax | $0.55 for each $500 or part of $500; up to $0.75 in a county of 2,000,000 or more people if the county board approves | Seller (by law) |
| Deed recording fee | $30 per document, any number of pages | Set in the purchase contract |
| Title insurance or title search | Varies by title company and price | By local custom, set in the contract |
| Closing or settlement fee | Varies | Often split, set in the contract |
| Prorated property taxes | Your share of the tax bill up to closing day | Each side pays for the days it owns the land, per the contract |
| Federal capital gains tax | 0%, 15% or 20% on the gain if you owned the land more than one year; ordinary income rates if one year or less | Seller, on the tax return |
| Michigan income tax on the gain | 4.25% flat rate (2025 tax year) | Seller, on the Michigan return |
Example: Seller Costs on a $25,000 Land Sale
- State transfer tax (50 units of $500 x $3.75)
- $187.50
- County transfer tax (50 units of $500 x $0.55)
- $27.50
- Total transfer taxes owed by the seller
- $215
$25,000 divided by $500 is 50 units. 50 x $3.75 = $187.50 state tax and 50 x $0.55 = $27.50 county tax, for $215.00. This uses the standard county rate. Title, closing, recording and prorated tax lines vary and are left out. When you sell to EasyLotBuyer, we pay the closing costs.
Selling Costs in Michigan: What to Know
Selling land in Michigan comes with two transfer taxes, a recording fee, title and closing charges, and possibly tax on your gain. By law the seller owes both transfer taxes. Most other costs are split by the purchase contract.
This page lists each cost, who usually pays it, and a worked example for a $25,000 lot. Rates come from Michigan statutes, county registers of deeds, the Michigan Department of Treasury and the IRS. This page is general information, not legal or tax advice.
Who pays what in a Michigan land sale
Michigan law makes the seller liable for both the state transfer tax and the county transfer tax. A contract can shift the cost, but the default is the seller.
Other costs follow the purchase contract and local custom. Read each line on the settlement statement before you sign.
- Seller by law: state and county transfer taxes.
- Set by the contract: title insurance, closing fee, recording fees.
- Shared by days owned: property taxes for the year of sale.
- Seller alone: any mortgage, lien or back tax payoff, paid from the proceeds.
Transfer tax rates and exemptions
The state rate is $3.75 and the county rate is $0.55 for each $500 of value or part of $500, per the Van Buren County register of deeds. Together that is $4.30 per $500. A county of 2,000,000 or more people may set its county rate up to $0.75 per $500 under MCL 207.504.
Transfers for less than $100 are exempt, along with other listed transfers such as some transfers between spouses and transfers by government units. The full list is in MCL 207.526. Ask the register of deeds if you think an exemption applies.
Recording fees
The register of deeds charges $30 to record a document, no matter how many pages it has, under MCL 600.2567. If a mortgage or lien must be released at closing, recording that release is another document fee.
Title company or attorney closing
Most Michigan land sales close through a title company, which searches the title, collects the transfer taxes and records the deed. You may also hire a real estate attorney to review the contract or handle a problem title, such as an estate or a missing heir.
Fees for title work and closing differ by company, so get a written quote before you agree to who pays.
Capital gains basics: federal and Michigan
Your gain is the sale price, less selling costs, less your basis. Basis usually starts with what you paid for the land and grows with costs like surveys you paid to buy it or improvements such as a road or well. Land you inherited or got as a gift has its own basis rules. See IRS Topic 703.
If you owned the land more than one year, the federal long-term rate is 0%, 15% or 20%, based on your taxable income. If you owned it one year or less, the gain is taxed at your regular rates. See IRS Topic 409. Higher earners can also owe the 3.8% net investment income tax.
The closing agent usually reports the sale to the IRS on Form 1099-S. You report the sale on your own return even if you had a loss.
Michigan taxes the gain as regular income at a flat rate. The rate for the 2025 tax year is 4.25%, per the Michigan Department of Treasury. This page is general information, not legal or tax advice.
How selling to a cash buyer changes your costs
A listed sale often carries an agent commission plus the seller lines above. A sale to a cash buyer like EasyLotBuyer skips the commission. We charge no fees or commissions, and we pay the closing costs, so lines like these do not come out of your check.
On a Michigan sale that means you do not pay the title, closing or recording lines in our deal. Your contract with us shows each cost and who pays it before you sign.
We make a cash offer within 24 hours and can close in as few as 7 days. We also buy land with back taxes, liens, title issues or no road access, and land held by heirs or an estate. Back taxes are paid at closing from the sale. Taxes on your own gain stay with you, so talk to a tax professional about that part. Start with a free land value estimate or see how we buy land in Michigan.
Sources
- 1. legislature.mi.gov
- 2. legislature.mi.gov
- 3. legislature.mi.gov
- 4. legislature.mi.gov
- 5. vanburencountymi.gov
- 6. legislature.mi.gov
- 7. michigan.gov
- 8. irs.gov
- 9. irs.gov
- 10. irs.gov
- 11. irs.gov
Rules and fees change; check with the county before you act on them.
Selling Cost Questions in Michigan
Who pays transfer tax in Michigan, buyer or seller?
The seller. Michigan law places both the state and the county transfer tax on the seller or grantor, unless the contract shifts it.
What is the Michigan transfer tax rate?
The state rate is $3.75 per $500 of value and the standard county rate is $0.55 per $500, for $4.30 per $500 in total. That is $8.60 per $1,000.
How much is the transfer tax on a $25,000 lot in Michigan?
$215.00 at the standard rates: $187.50 state tax and $27.50 county tax.
How much does it cost to record a deed in Michigan?
$30 per document, no matter how many pages, under MCL 600.2567.
Do I pay Michigan income tax when I sell land?
A gain on the sale is taxable income in Michigan. The flat rate was 4.25% for the 2025 tax year. Talk to a tax professional about your own return.
Is there an exemption from Michigan transfer tax?
Yes, for some transfers, such as a transfer for less than $100 and certain transfers between spouses. MCL 207.526 has the full list.
Does EasyLotBuyer charge any fees?
No. We charge no fees or commissions, and we pay the closing costs.