LANSING – State Representative Marc Corriveau (D-Northville) today called for lawmakers in the State Senate to work together 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.
"By stimulating the home sales market we can jumpstart our economy and create more jobs for our workers," Corriveau said. "The spring sales season is right around the corner. By taking quick action, we can give homebuyers a great reason to hit the housing market and buy a new house. This plan will pump more money into our economy, which is exactly what we need right now."
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 House 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.
"There is no excuse for the Senate to delay action on our plan to cut taxes for homebuyers," Corriveau said. "Not only will this plan help spur home sales, it will also pump more money into our local stores. New homeowners spend a lot of money making their new house a home. Every dollar that is spent on paint, appliances and household items will help boost our economy and create new jobs for our workers, which is exactly the change that we need."