FeedsHouse proposal would spark real estate market
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State Rep. Marc Corriveau (D-Northville), left, and State Rep. Richard LeBlanc (D-Westland) unveiled a plan on Monday to help spur the sluggish real estate market and protect homeowners.Michigan homeowners having difficulty with the stagnant real estate market could soon see some relief.
Members of the House Democratic Party unveiled a Homeowner Protection and Stimulus Plan on Monday designed to help spark the real estate market and protect homeowners from foreclosure.
“Empowering our residents to buy new homes is the best way to increase long-term investment in our community,” said State Rep. Mark Corriveau (D-Northville). “It also will pump more money into our economy and help get Michigan back on track.”
The plan would suspend the ‘pop-up tax’ that home buyers run into after they purchase a different house. For the next 18 months, anyone who buys a home will not have to pay the tax for as long as they own the home, according to State Rep. Richard LeBlanc (D-Westland).
“It’s not just for the 18 month period where you buy the home, it’s for as long as you own the home,” he said. “It’s a pretty interesting proposal.”
Currently, Proposal A dictates that the assessed value of a home can only increase by 5 percent annually or the rate of inflation, whichever is lower. When a property is sold or transferred, though, the assessment is uncapped and the home is taxed on the State Equalized Value (SEV). That can cause a dramatic spike in the amount of taxes paid and represent a hidden costs that threatens homeowners. Depending on how long the previous owner has owned the home, tax bills can double or more, LeBlanc said.
He should know. He said he decided against purchasing a new home in Westland for just that reason.
He said the plan could save taxpayers between $1,500 and $3,000, depending on the value of the home.
“Many seniors are hit hard by the pop-up tax when they sell the family home they’ve owned for years to move to a smaller, more manageable home,” he said.
“The increase in taxes can sometimes make such a move impossible,” he added.
The plan would still need to be approved by the House of Representatives and the Michigan Senate. The bill was introduced on Monday, but has not yet been acted on, LeBlanc said.
“We’re going to consider this this week,” he said.
Another piece of legislation is aimed toward protecting residents from foreclosure in the event that they have lost their job due to outsourcing or layoffs.
Eligible residents would receive six months worth of mortgage or tax payment assistance through a second mortgage, through a public-private partnership with lenders.
