Need more buyers? You can truly help effect change! Buyers who purchase a home in Michigan after May 1st are currently stuck with whatever property tax designation is on the home at the time of the closing.
Michigan Realtors can help more people buy homes by supporting bill HB 5334. Let's start a grassroots action to get this passed! More business for Realtors is a great side bonus!
There is a bill introduced in the Michigan House - HB 5334, which would remove the deadline to file for an exemption (which saves around 45% on property taxes). It would be changed to pro-rate the exemption to the date the home is occupied by the new homeowner.
If the home has been vacant, the tax status has usually been changed to Non-Homestead (as in, no longer the Principal Residence) of the homeowner. This is almost always true of foreclosures (due to the extended periods they are vacant), and can be true for rented properties, 2nd homes, or various other circumstances (i.e. Couple living separately in two owned homes, but divorce not yet final).
Currently, more home buyers are being affected by the May 1st deadline than ever before, as almost all foreclosure properties are non-homestead. This causes the lender on the new buyer's mortgage to "reserve" tax amounts at closing to pay the future tax bills based on the non-homestead amount.
The current unequal and arbitrary May 1st deadline is preventing people from buying homes because it also raises their monthly mortgage payments by almost a double tax amount.
Back when the Headlee amendment passed, it may have been difficult to pro-rate the homestead exemption, but in this day and age of computers it should be a simple fix. This bill will correct a basic flaw in the system which never should have occurred in the first place, because home buyers should be taxed on an equally applied basis.
The bill is currently in committee, and needs support to be called out. One analysis has estimated that the overall tax effect for the state will be minimal.
What can YOU do?
1) Call your rep at the Michigan Association of Realtors & say that you would like this bill supported.
2) Call your District Representative in the Michigan House & tell them you support pro-rating the homestead or "Principal Residence Exemption" for all home buyers, whatever time of the year they purchase a home. Find your Rep: http://house.michigan.gov/find_a_rep.asp
3) Contact Tax Policy Committee Chair Steve Bieda and tell him you would like this bill brought out of committee onto the House floor for a vote. stevebieda@house.mi.gov stevebieda@house.mi.gov
| Fax: 517-373-5906 |
| Phone: 517-373-1772 |
If you would like to read the bill, here is the link: http://www.legislature.mi.gov/documents/2007-2008/billintroduced/House/htm/2007-hIB-5334.htm The new part of the bill is short & sweet.
The bill, if passed, changes the wording of the existing law. (Key to reading it: Strikeout text is what is removed from the existing bill, and Bold text is what is being added new).
Let's make a difference!
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