LANSING – In a move to prevent more residents from losing their homes to foreclosure, State Representative Richard LeBlanc (D-Westland) on Thursday approved a plan to prevent homeowners' property taxes from going up when the value of their home falls.
"Michigan residents are paying more in property taxes as the value of their homes continue to fall – it just doesn't make sense," said LeBlanc, sponsor of the plan. "Our current system just isn't working for Michigan's homeowners. As home values fall, we must protect our residents and ensure that property taxes remain steady."
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.
"This is a common sense plan that will fix our backwards cycle of lower property values and higher taxes," LeBlanc said. "It will bring much needed relief to our struggling homeowners. It is just one more step toward boosting our economy and moving Michigan forward."