HB 5872 — Property tax: assessments; taxable value of transferred property; modify. Amends sec. 27a of 1893 PA 206 (MCL 211.27a).

HB-5872, As Passed House, May 20, 2026 SUBSTITUTE FOR HOUSE BILL NO.

For taxes levied in 1995, the BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 property's taxable value in the immediately preceding year is the property's state equalized valuation in 1994.

(5) Assessment of property, as required in this section and section 27, is inapplicable to the assessment of property subject to the levy of ad valorem taxes within voted tax limitation BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 increases to pay principal and interest on limited tax bonds issued by any governmental unit, including a county, township, community college district, or school district, before January 1, 1964, if the assessment required to be made under this act would be less than the assessment as state equalized prevailing on the property at the time of the issuance of the bonds.

BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 (ii) Beginning December 31, 2014, for residential real property, if the settlor or the settlor's spouse, or both, conveys the residential real property to the trust and the sole present beneficiary or beneficiaries are the settlor's or the settlor's spouse's mother, father, brother, sister, son, daughter, adopted son, adopted daughter, grandson, or granddaughter and the residential real property is not used for any commercial purpose following the conveyance.

If a present beneficiary fails to comply with a BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 request by the department of treasury or assessor under this subparagraph, that present beneficiary is subject to a fine of $200.00.

Upon request by the department of BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 treasury or the assessor, the sole present beneficiary or beneficiaries shall furnish proof within 30 days that the sole present beneficiary or beneficiaries meet the requirements of this subparagraph.

Unless notification is provided BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 under subsection (10), the corporation, partnership, sole proprietorship, limited liability company, limited liability partnership, or other legal entity shall notify the assessing officer on a form provided by the state tax commission not more than 45 days after a conveyance of an ownership interest that constitutes a transfer of ownership under this subdivision.

For purposes of this subdivision, a transfer of ownership occurs only as to that portion of the parcel established as a separate tax parcel and only that portion, shall must have its taxable value adjusted under subsection (3) BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 and shall be is subject to the recapture tax provided for under the agricultural property recapture act, 2000 PA 261, MCL 211.1001 to 211.1007.

Upon request by the department of treasury or the assessor, the transferee shall BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 furnish proof within 30 days that the transferee meets the requirements of this subdivision.

Upon request by the department of treasury or the assessor, the sole present beneficiary or beneficiaries shall furnish proof within 30 days that the sole present beneficiary or beneficiaries meet the BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 requirements of this subparagraph.

BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 (l) Normal public trading of shares of stock or other ownership interests that, over any period of time, cumulatively represent more than 50% of the total ownership interest in a corporation or other legal entity and are traded in multiple transactions involving unrelated individuals, institutions, or other legal entities.

(o) Except as provided in subsection (6)(k), a transfer of qualified agricultural property, if the person to whom the qualified agricultural property is transferred files an affidavit with the assessor of the local tax collecting unit in which the BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 qualified agricultural property is located and with the register of deeds for the county in which the qualified agricultural property is located attesting that the qualified agricultural property will remain qualified agricultural property.

(p) A transfer of qualified forest property, if the person to whom the qualified forest property is transferred files a qualified forest taxable value affidavit with the assessor of the local tax collecting unit in which the qualified forest property is located BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 and with the register of deeds for the county in which the qualified forest property is located attesting that the qualified forest property will remain qualified forest property.

An owner of qualified forest property shall inform a prospective buyer of that qualified forest property that the qualified forest property is subject to the recapture tax provided in the qualified forest property recapture tax act, 2006 PA 379, MCL 211.1031 to 211.1036, if the qualified forest property is BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 converted by a change in use, as that term is defined in section 2 of the qualified forest property recapture tax act, 2006 PA 379, MCL 211.1032.

(q) Beginning on December 8, 2006, a transfer of land, but not buildings or structures located on the land, which that meets 1 or BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 more of the following requirements:

(u) Beginning December 31, 2014, a transfer of residential real property if the transferee is the transferor's or the transferor's spouse's mother, father, brother, sister, son, BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 daughter, adopted son, adopted daughter, grandson, or granddaughter and the residential real property is not used for any commercial purpose following the conveyance.

(i) The land is made subject to a conservation easement under subpart 11 of part 21 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.2140 to 324.2144, prior to BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 before the conveyance by distribution under a will or trust or by intestate succession.

(b) The owner of the qualified agricultural property files an BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 affidavit with the assessor of the local tax collecting unit under subsection (7)(o).

BEG H04272'25 (H-2)(H-2)_HB5872_APH_1 cx58q76a02ij 1 (b) "Beneficial use" means the right to possession, use, and enjoyment of property, limited only by encumbrances, easements, and restrictions of record.

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