LANSING – State Representatives Mark Meadows (D-East Lansing) and Joan Bauer (D-Lansing) today called on the Republican-led Senate to pass 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 on March 14, 2007, with bipartisan support and has been stalled in the Senate for nearly a full year.
"Nearly a year ago, we passed a plan that will jumpstart Michigan's home sales market and boost our economy by cutting taxes for homebuyers," Meadows said. "And for nearly a year, that plan has been held up by the Republican-led Senate. While the Senate has been dragging its feet, Michigan's home sales and home values have been dragged down too. It's time for the Senate to stand up for our working families and pass our plan now."
The House Democrats' 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 House Democrats' plan, 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.
Michigan has been hit hard by home foreclosures, with many neighborhoods bogged down by numerous vacant houses that have been on the market for months. Cutting taxes for homebuyers will help spur home sales, which will bring more money back into Michigan's economy and help create jobs.
"Increasing home sales will build strong communities and get realtors, construction workers, home builders, and so many other people in the housing industry who have lost their jobs back to work," Bauer said. "Plus, ever dollar that new homeowners spend on paint, appliances and other household items will boost our economy and create new jobs for our workers. This plan is the catalyst for change we need in Michigan."