LANSING – In a move to prevent more residents from losing their homes to foreclosure, the Michigan House of Representatives today approved a plan that will prevent homeowners' property taxes from going up when the value of their home falls.
"Many homeowners are paying more in taxes year over year even as their home values fall, and that isn't right," Corriveau said. "This set-up simply doesn't work. Protecting our residents from being pinched on their property taxes will keep more of our working families from losing their homes."
Under current state law a property's taxable value can increase by either 5 percent or the rate of inflation, whichever is less, as long as it is less than the property's assessed value. If the assessed value falls below the taxable value cap, then the home's taxable value is equal to its assessed value. The plan passed today by the Michigan House would prevent a homeowner from having to pay more in taxes if their home value declines. Instead, the homeowner would pay the same amount of taxes as the previous year, ending the bad practice that is eroding homeowners' equity.
"No one should have to pay higher taxes when their home values fall," Corriveau said. "This plan will end the cycle that many of our residents have seen repeated over the past few years: lower home values and higher taxes. It will also help more residents protect the investment they've made in their home and avoid falling into foreclosure."