LANSING - State Representative Terry Brown (D-Pigeon) today called for immediate bipartisan action on a plan that will cut taxes for homebuyers and help spur Michigan's languishing home sales market. The plan passed the Michigan House of Representatives nearly a year ago - on March 14, 2007 - and is now awaiting action in the Senate.
"We must stimulate the real estate market immediately in order to get our economy moving in the right direction and create more jobs for our workers," Brown said. "With the spring sales season about to kick in, now is the time to make it easier for residents to buy some of the many homes in our communities that have been on the market for months. This plan will go a long way toward putting more people back to work and pumping more money into our local businesses."
The House plan creates an 18-month window during which anyone who buys a house will inherit the seller's taxable value, and will not have their taxes uncapped for as long as they own the home. Currently, the assessed taxable value of a home has strict limits on how much it can increase annually - either by 5 percent or the rate of inflation, whichever is lower. However, when the property is sold, its assessment is uncapped. In some cases, the amount of taxes a new homeowner must pay doubles, making it difficult for working families to be able to afford to buy a home. Under the plan passed by the House, 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.
The Thumb and the rest of Michigan have been hit hard by home foreclosures. Cutting taxes for homebuyers will help spur home sales, which will bring more money back into Michigan's economy and help create jobs.
"Creating jobs for our workers right now is my top priority, and this plan will do that," Brown said. "Spurring home sales will have a ripple effect in our economy. New homeowners spend money on items such as paint, appliances, and furniture and often pay for remodeling or other services, in addition to creating work for people in the real estate and mortgage industries. The Thumb area will see immediate economic benefits from this plan, which is why I call on our State Senate leaders to act now."