Potentially good news out of Lansing for Michigan home sellers. Democrats are initiating legislation to allow home buyers to pay the same amount in taxes as the home seller was paying.
Under the state’s current tax structure, the assessed taxable value of a home can rise annually by no more than 5 percent or the inflation rate. But when the house is sold, the new owner’s property taxes usually rise by far more because the cap is lifted.
Legislation unveiled Monday would eliminate the so-called “pop-up†tax for residents who buy a house in the next 18 months.
Democrats said their plan — endorsed by Gov. Jennifer Granholm — would boost Michigan’s economy by increasing home sales. To offset lost revenue for local governments, Democrats would increase the real estate transfer tax from .75 percent to .85 percent and funnel the extra money directly to local governments instead of K-12 schools.
We are no fans of Proposal A, and are happy to see some relief potentially in sight for home sellers. This could do a lot to stimulate the real estate market, at least in the short term.
Read more from David Egger’s AP article here.
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Written by Maureen Francis
SKBK Sotheby's International Realty, 248.430.4450
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{ 2 comments… read them below or add one }
Carole Cohen 03.14.07 at 6:34 pm
I hope it helps. I agree, did not sound like a reasonable tax idea from the beginning!
Sharon Simms 03.14.07 at 7:18 pm
Maureen - Florida has a 3% Save-Our-Homes cap and the current legislature is trying to come up with ways to avoid the inequities that have resulted. Between property taxes and insurance rates, all of our legislators will have their hands full this year.