Property Transfer Affidavit

Effective January 1, 1995, Act 415, Public Acts of 1994, requires the buyer, grantee, or a transferee of any property to file a real estate transfer affidavit Form L-4260, Property Transfer Affidavit.  This form must be filed whenever real estate or some types of personal property are transferred, even in the event you are not recording a deed.

The property transfer affidavit is used by the assessor to ensure the property is assessed properly and receives the correct taxable value.  The property tax reforms instituted under "Proposal A" required a "cap" or limitation on the annual increase in a propertys taxable value while the property ownership remains the same. An excerpt from the Michigan 1963 Constitution, Section 3, states: "For taxes levied in 1995 and each year thereafter, the legislature shall provide that the taxable value of each parcel of property adjusted for additions and losses, shall not increase each year by more than the increase in the immediately preceding year in the general price level, as defined in section 33 of this article, or 5 percent, whichever is less until ownership of the parcel of property is transferred."  Therefore, in the tax year following the transfer of the property, the taxable value will "uncap" and become equal to the "assessed value".  The year following the uncapping, the limitation will begin anew until such time the property transfers again.

The assessed value is one-half of the assessors estimate of market value of your property.  The capped value is calculated annually using the following formula:  (Prior Year Taxable Value - LOSSES) x (lesser of the consumers price index or 1.05) + ADDITIONS = CAPPED VALUE. Taxable value is equal to the lesser of Assessed Value or Capped Value.  The taxable value, the number upon which the property taxes are levied, is determined each year by comparing the assessed and capped values and choosing the lower of the two.

A new property owner must file the Property Transfer Affidavit, Form 4260, with the assessor for the city or township where the property is located within 45 days of the transfer. If it is not filed timely, a penalty of $5.00 per day (maximum $200.00) applies.  (NOTE: Under the recommendation of the City Assessor, the City of Rochester Hills City Council has adopted a resolution waiving the late or non-filing fee imposed by Act 415)

The mandatory filing of the property transfer affidavit requires the following information be provided: identification of the property transferred; the parties to the transfer; the date of the transfer; and, the actual consideration for the transfer.  Additional optional information regarding the transfer is also requested.  The information on Form L-4260 is NOT CONFIDENTIAL.

The City of Rochester Hills Assessing Department, 1000 Rochester Hills Drive, Rochester Hills, MI 48309-3033 has copies of Property Transfer Affidavit, Form L-4260 and is available to answer questions regarding the form at (248) 656-4605.

Consumer Price Index History:  

1995	1.026
1996	1.028
1997	1.028
1998	1.027
1999	1.016
2000	1.019
2001	1.032
2002	1.032
2003	1.015
2004	1.023

2005                      1.023
2006                      1.033
2007                      1.037