LANSING – State Representative Gary McDowell (D-Rudyard) today called on the Michigan Senate to pass a plan that will cut taxes for homebuyers and help spur Michigan's languishing home sales market. The plan passed the Michigan House of Representatives on March 14, 2007, with bipartisan support and has been stalled in the Senate for nearly a full year.
"A year ago, the House passed this needed bipartisan legislation as part of our plan to help move Michigan forward," McDowell said. "Every day that the Senate fails to act is another day a house sits vacant in Northern Michigan, and another day our local businesses struggle to make ends meet. Taking action to increase the number of Michigan residents who own their own homes will help more people achieve the American Dream and bolster our middle class."
The House plan creates an 18-month window during which anyone who buys a house will inherit the seller's taxable value, and will not have their taxes uncapped for as long as they own the home. Currently, the assessed taxable value of a home has strict limits on how much it can increase annually – either by 5 percent or the rate of inflation, whichever is lower. However, when the property is sold, its assessment is uncapped. In some cases, the amount of taxes a new homeowner must pay doubles, making it difficult for working families to be able to afford to buy a home. Under the House plan, a homebuyer could save up to $1,513 on the purchase of a $100,000 home or up to $3,405 on a $225,000 home, based on statewide average tax rates.
Michigan has been hit hard by home foreclosures, with many neighborhoods bogged down by numerous vacant houses that have been on the market for months. Cutting taxes for homebuyers will help spur home sales, which will bring more money back into Michigan's economy and help create jobs.
"Homeownership builds healthy communities, a solid tax base and a booming economy," McDowell said. "There is no good reason or excuse for the Senate to continue its stonewalling. This plan will bring relief to consumers, help jumpstart the real estate industry, boost our economy and help create jobs now."