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What is “uncapping”?

When ownership is transferred on a property, the valuation is “uncapped”. The SEV is the new starting point for a buyer and the capping process starts all over again on the property until another transfer of ownership occurs. ¬†Beginning December 31, 2013 (PA 497 of 2012), the transfer of residential real property (homestead or non-homestead) is exempt from uncapping if the transferor by blood or affinity to the first degree and the use of the property does not change following the transfer of ownership. A change in use would be from principal residence to rental, which would not be exempt from uncapping due to a transfer. ¬†Affinity to the first degree includes the following relationships: spouse, father or mother, father or mother of spouse, son or daughter, including adopted children, son or daughter of spouse, and stepchildren, stepmother or stepfather.

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