LANSING – State Representatives Andy Meisner (D-Ferndale), Aldo Vagnozzi (D-Farmington/Farmington Hills), Paul Condino (D-Southfield), Tim Melton (D-Pontiac) and Marie Donigan (D-Royal Oak) today unveiled the Homeowner Protection and Stimulus Plan, a package of bills that will help jumpstart Michigan's home sales market by suspending the so-called "pop-up tax" and protect residents from losing their homes when they lose their jobs to outsourcing or downsizing.
"This bill is about expanding the middle-class dream in Michigan," said Meisner, who is a sponsor of the bill. "By suspending the pop-up we will rejuvenate the real estate market, make home-buying more affordable and allow seniors to downsize without paying a property tax penalty on their smaller home."
The House Democrats' plan will eliminate the so-called pop-up tax for Michigan residents who buy a house during the next 18 months. Residents who purchase a home during this window will not have to pay the pop-up tax for as long as they own the home.
"This is a solid plan that will stimulate new home sales," said Vagnozzi, who has also introduced legislation that will permanently protect seniors and individuals with disabilities from substantial property tax increases associated with the pop-up. "Too many Michigan residents and potential homeowners are in need of relief and this will alleviate some of their financial burden."
The Vagnozzi bill will make a permanent change to property taxes enabling seniors or the disabled to buy a new home or downsize their home and not pay the pop-up tax if they move within their existing community.
Under the 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.
"This package is designed to give Michigan's economy a much-needed boost," Condino said. "By giving consumers an opportunity to spend less on the cost of a house, residents will have more money to spend on big-ticket items for their new home which will help our local economy."
Currently, the assessed taxable value of a home may increase annually by either 5 percent or the rate of inflation, whichever is lower. When the property is sold or transferred, however, its assessment is uncapped and the home is taxed based on its State Equalized Value.
"Times are definitely tough and the legislature must do everything it can to provide Michigan citizens with a more stable economy, and the tools to help new homeowners purchase a home," Melton said."
Oakland County Democrats also are developing a plan that will protect homeowners who have lost their jobs to outsourcing or downsizing from also losing their homes. Under the plan, eligible residents would receive assistance to make their mortgage and tax payments for six months. The assistance would be funded by a second mortgage on the residence. The state would form a public-private partnership with lenders to facilitate the program.
"There is an overabundance of homes for sale throughout Oakland County," Donigan said. "Eliminating the pop-up tax will boost home sales and build stronger communities."