On March 27, 2008, the Michigan Senate took action in passing legislation to stimulate the housing industry in Michigan. The Senate Economic Stimulus Plan gives a boost to the housing industry by providing property tax relief, while putting more money back into the homeowner's pocket. It does so by offering a window for homebuyers to avoid the pop-up tax now and for the duration of their homeownership.
The Senate package (SB 1065, 790, 791, HB 4215, ) alleviates the issue of homeowners who continue to lose equity in their homes, while allowing potential homebuyers to move forward with the dream of homeownership without financial penalties. Senator Jud Gilbert (R-Algonac) and Senator Roger Kahn (R-Saginaw Twp) spoke on the Senate floor today and stressed the importance of a "pop up" tax moratorium in order to boost Michigan's housing market while spurring the economy.
Details of the legislation include:
791 (Kahn substitute) offers immediate substantial relief for Michigan taxpayers who purchase a home within the next 33 months.
SB 1065 (Cassis) - Increases the Homestead Property Tax Credit from $1200 to $1300 to those who qualify 790 (Pappageorge) - Increases the income thresholds of the Homestead Property Tax Credit by $10,000
4215 (Gaffney) Extends principal residence exemption to unsold homes
You may recall that a similar package was introduced in the House last year, which implemented an 18-month moratorium on the "pop up". The Senate plan creates a 33-month window. It works by providing an income tax credit to reimburse homebuyers for any "pop up". Those homeowners with no income tax liability would still receive a check from the state for that "pop up" amount. While the House and Senate plans differ in their mechanics, we are confident that both sides will come together and work to provide aid to homeowners and homebuyers. This will give Michigan's economy a much needed shot in the arm. This is a historic time for homebuyers, and it's a great time to buy.