DEARBORN HEIGHTS – House Speaker Andy Dillon (D-Redford Twp.) 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.
"The real estate industry is struggling, with many Realtors and mortgage brokers being laid off due to lagging home sales," Dillon said. "This plan will get those people back to work and pump more money into our local economy. My colleagues in the House and I are fighting to create jobs now and change Michigan for the better. By dragging its feet, the Republican-led Senate is dragging down Michigan. The time to act is now before the spring sales season kicks in."
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. Foreclosure filings in Wayne County shot up nearly 70 percent in 2007 compared with 2006. Cutting taxes for homebuyers will help spur home sales, which will bring more money back into Michigan's economy and help create jobs.
"It's been a year since this plan was passed by the House, and the housing market has continually gotten worse," Dillon said. "We have the opportunity to jumpstart our economy and pump more money into our local businesses by cutting taxes for homebuyers. This is a common-sense plan that will help get Michigan back on track. The Senate needs to take action now."