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New Uncapping Exemption for Ladybird Transfers
A new real estate uncapping exemption was enacted this week which formally exempts ladybird transfers to close family members from uncapping. It was signed by Governor Snyder on December 22, 2015 (PA 243).
Under the new law, where the grantor transfers a remainder interest in a residential property to an immediate family member but retains a life estate, the taxable value of residential property will not be uncapped upon the grantor's death, as long as the property is not "used for any commercial purpose" following the transfer. The list of eligible family members is provided in the statute, but it includes parents, children, adopted children, siblings, grandparents, grandchildren. Notably, "used for any commercial purpose" specifically excludes the rental of residential property for a period of less than 15 days per calendar year.