LANSING – State Representative Terry Brown (D-Pigeon) today unveiled the Homeowner Protection and Stimulus Plan, a package of bills that will help jumpstart Michigan's economy by suspending the so-called "pop-up tax" and also protect residents from losing their homes when they lose their jobs to outsourcing or downsizing.
"Eliminating the pop-up tax makes buying a home more affordable for young families trying to get a start in life," Brown said. "It also protects seniors from a sudden surge in taxes when they move out of the family home they've owned for years to a smaller, more manageable home."
The plan eliminates the pop-up tax for residents who buy a house during the next 18 months. They will not have to pay the pop-up tax for as long as they own the home. The plan could save a homebuyer up to $1,513 on the purchase of a $100,000 home, based on statewide average tax rates.
Currently, the assessed taxable value of a home may increase yearly by 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. This drastic re-assessment creates a pop-up tax that can double the amount of taxes new homeowners must pay for as long as they own the home.
In addition, Brown and his colleagues are developing a plan to protect homeowners who have lost their jobs to outsourcing or downsizing. 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 run the program.
"As we work to get Michigan back on track, it is only right to support our workers who have lost their jobs to outsourcing or downsizing," Brown said. "Losing a home can devastate a family. Our hard-working residents deserve the dignity of being able to stay in their own homes while they get back on their feet."