By Eric Berman, REALTOR® | The Eric Berman Team at Compass
TL;DR:
The affordability gap is the largest in this series — a Nassau seller's proceeds go further here than anywhere else covered. The thing that catches buyers is Michigan's property tax structure: taxable value growth is capped while you own a property, and it uncaps on transfer. A seller's current bill may be far below what a new owner will pay on the same house, so asking what it is now tells you very little. The exemption that reduces the bill also requires filing rather than arriving automatically.
Start With the Long Island Sale
At roughly 600 miles this is one of the shorter moves in the series, drivable in a day, which tempts people to overlap the transactions. It still rarely works, and the Long Island sale sets the budget.
Before touring anything, know what the current home nets — commission, New York State Transfer Tax at four dollars per thousand, attorney fees generally $1,500 to $3,500, preparation, and carrying costs. The full breakdown of what a Long Island sale costs covers each line.
A seller who establishes Michigan residency before the Long Island closing becomes a New York nonresident for that transaction, triggering Form IT-2663 — an estimated payment at closing of 8.82 percent of net gain. That's a prepayment rather than an additional tax, refundable where the real figure comes in lower, but it reduces the wire. For a long-held home, the exclusion covers $250,000 single and $500,000 filing jointly, and improvement records reduce taxable gain substantially, which the full treatment of how gain is calculated covers. Sell first.
The Tax Bill Resets When You Buy
This is the item that surprises buyers in Michigan and it appears in no relocation content about the state.
Michigan distinguishes between a property's assessed value and its taxable value. While one owner holds a property, growth in taxable value is capped — it can rise only by a limited amount each year regardless of what the market does. That's favorable to a long-term owner and it works much like the assessment limitations in Florida, California, and Oregon.
What differs is what happens at sale. When a property transfers, the taxable value uncaps and resets, typically to the assessed value. For a home held a long time by an owner who benefited from years of capped growth, that reset can be substantial.
The consequence for a buyer is direct. A seller's current tax bill may be well below what a new owner will pay on the same house, and asking what the seller pays tells you almost nothing about what you'll pay. This is the third version of the same trap in this series — Florida's Save Our Homes and California's base year both create it — and in every case a relocating buyer reasons from a number that doesn't apply to them.
Ask the local assessor what the bill will be after uncapping, not what it is now, on every specific property.
And the exemption requires filing. Michigan's Principal Residence Exemption reduces the tax burden on an owner-occupied primary residence, and it isn't automatic on purchase — a new owner files for it, and one who doesn't pays more than necessary. That's the sixth destination in this series with a filing requirement nobody mentions, after Nevada, Vermont, Maine, Florida, and Texas.
One more cost line worth budgeting. Michigan auto insurance rates have historically run high relative to other states, which is a recurring household expense rather than a housing one but large enough to belong in the comparison.
The Affordability Gap Is Real and It's the Largest Here
Of twenty-nine destinations covered in this series, this is where a Nassau County seller's proceeds go furthest. Housing costs are dramatically lower, and the difference is large enough to change what kind of property is within reach rather than just how much house.
Two things to understand about how that varies. The metro is not one market — city neighborhoods and the surrounding suburbs behave very differently in price, condition, and pace, and comps from one do not translate to the other. And condition varies enormously within short distances in ways a Long Island buyer isn't used to, which makes inspection and condition diligence more important here than in a market with more uniform stock.
Two practical items. Michigan winters are genuinely colder and snowier than Long Island's, more like upstate New York, which means heating load and a realistic allowance for snow removal and winter maintenance. Ask for twelve months of actual utility bills on any specific property. And older housing stock is common across much of the metro, which brings the usual questions about systems, wiring, and foundations forward.
Water Is Worth Asking About by Address
Lead service lines and drinking water infrastructure have been a live public issue in parts of the region, with replacement programs underway in various municipalities on their own timelines.
For a buyer, the questions are narrow and answerable. What the service line material is at the specific property, which municipalities increasingly track and disclose. Whether the municipality has a replacement program and where that property sits in it. And what the water bill actually runs, since rates vary considerably across the metro.
This isn't a reason to avoid the market — it's a question with a definite answer that a Long Island buyer on municipal supply has no reason to think of, and it's better asked before an offer than after.
Buying Works Differently
Michigan transactions are typically handled by title companies, and no attorney is necessarily involved on either side. For a New York seller accustomed to counsel drafting the contract, negotiating on their behalf, and running the closing, that's a real adjustment — a buyer who wants legal review retains one separately and pays for it, which is worth deciding before the transaction rather than partway through. The fuller picture of what the attorney handles here describes what you'd be giving up.
Michigan also uses a statutory seller disclosure statement with its own requirements, which differ from New York's Property Condition Disclosure Statement in scope and timing. Worth understanding before signing rather than during.
Property taxes vary substantially by municipality across the metro — more than a Long Island buyer might expect given how close the communities sit to each other. Combined with the uncapping question, that makes the full tax bill on a specific address the single most informative document in a Michigan purchase.
A Worked Example
Consider a composite case — a Nassau County household relocating for a Detroit-area position, selling a colonial that comped near $1,080,000 and buying at roughly $390,000.
The tax reset was the discovery. The home they liked had been owned by the same family since the 1990s, and their current bill reflected decades of capped taxable value growth. The figure after uncapping was materially higher, and nobody had raised it — they found it by asking the assessor rather than reading the listing.
They also filed the Principal Residence Exemption promptly after closing rather than discovering it a year later, and asked about the service line material at the address, which the municipality was able to answer.
On the New York side they sold first, despite the drivable distance. Their attorney's early title review turned up a satisfied 2016 equity line never discharged, cleared in four weeks before listing.
Where to Start
Build the net-proceeds model on the Long Island home and sell first, even at this distance. Call the town or village building department about permits. Engage a New York real estate attorney early and talk to a CPA about IT-2663 and capital gains before setting a closing date.
On the Michigan side: ask the local assessor what the tax bill will be after uncapping rather than what the seller pays now, on every specific property. Find out what the Principal Residence Exemption filing requires and do it promptly after closing. Ask about the water service line material at the address and any municipal replacement program. Get twelve months of utility bills. Budget for auto insurance separately. And decide whether you want your own counsel, since none comes with a title company closing.
Sellers wanting a current read on where their Long Island home sits can start with a quiet look at present value.
The Honest Bottom Line
The affordability gap here is the largest in this series, and for a Nassau County household the financial case is straightforward in a way it isn't anywhere else covered.
What catches buyers is the tax structure. Michigan caps taxable value growth while you own a property and uncaps it when you buy one, which means a seller's bill tells you almost nothing about yours. That's a five-minute question for the local assessor and a real number either way. The exemption that reduces it requires a filing nobody mentions.
And water is worth asking about by address rather than by region, because the answer is specific to a property and a municipality rather than to the metro.
For anyone working through what their Long Island home would net before any of that begins, that conversation is available whenever the timing suits.
This is general information, not legal, tax, insurance, or financial advice. Michigan property tax provisions, taxable value uncapping, exemption requirements, disclosure obligations, and water infrastructure programs vary by municipality and change. Confirm current specifics with a Michigan attorney, the local assessor, and the municipality, and confirm New York specifics with a licensed New York real estate attorney and a CPA.
FAQs
Why will my property tax bill differ from the seller's in Michigan?
Because taxable value uncaps on transfer. Michigan caps how much a property's taxable value can rise each year while one owner holds it, regardless of what the market does — favorable to a long-term owner. When the property sells, that taxable value uncaps and resets, typically to the assessed value. For a home held a long time, the reset can be substantial, which means a seller's current bill may be well below what a new owner pays on the same house. Ask the local assessor what the figure will be after uncapping rather than what it is now.
What is Michigan's Principal Residence Exemption?
An exemption that reduces the tax burden on an owner-occupied primary residence, and it isn't automatic on purchase — a new owner has to file for it, and one who doesn't pays more than necessary. That makes Michigan the sixth destination in this series with a filing requirement nobody mentions, after Nevada, Vermont, Maine, Florida, and Texas. Ask the local assessor what the filing requires and the deadline, and do it promptly after closing rather than discovering it a year later.
How much cheaper is Detroit than Long Island?
Of the destinations covered in this series, this is where a Nassau County seller's proceeds go furthest — the difference is large enough to change what kind of property is within reach rather than just how much house. Two qualifiers. The metro is not one market: city neighborhoods and surrounding suburbs behave very differently in price, condition, and pace, so comps from one don't translate to the other. And condition varies enormously within short distances in ways a Long Island buyer isn't used to, which makes inspection diligence more important.
What should I ask about water in the Detroit area?
What the service line material is at the specific property, which municipalities increasingly track and disclose, whether the municipality has a replacement program and where the property sits in it, and what the water bill actually runs since rates vary across the metro. Lead service lines and drinking water infrastructure have been a live public issue in parts of the region, with replacement programs underway on different timelines. It's a question with a definite answer, better asked before an offer than after.
Does Michigan require an attorney to buy a home?
No. Transactions are typically handled by title companies with no attorney necessarily involved on either side. For a New York seller accustomed to counsel drafting the contract, negotiating, and running the closing, that's a real adjustment, and a buyer who wants legal review retains one separately. Michigan also uses a statutory seller disclosure statement with requirements and timing that differ from New York's Property Condition Disclosure Statement — worth understanding before signing rather than during.
By Eric Berman, REALTOR® | The Eric Berman Team at Compass
Eric Berman | Long Island & Queens Associate Broker | Compass
1468 Northern Blvd, Manhasset, NY 11030
(917) 225-8596 | eric@ericbermanre.com | theericbermanteam.com
