LANSING – State Representative Richard LeBlanc (D-Westland) today voted in support of a bill designed to help jumpstart Michigan's home sales market by eliminating the so-called "pop-up tax" for 18 months. The bill passed on a vote of 77 to 31; it now heads to the Senate.
"As Michigan struggles to get back on track, we must do all that we can to give our economy a boost – and that's what eliminating the pop-up tax will help to do," LeBlanc said. "Making homeownership more affordable will help increase home sales and pump more money back into our economy. It's the right thing to do to get Michigan back on track."
The plan will eliminate the so-called pop-up tax for Michigan residents who buy a house during the next 18 months. Residents who purchase a home during this window will not have to pay the pop-up tax for as long as they own the home. Under the plan, a home buyer 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.
Currently, the assessed taxable value of a home may increase annually by either 5 percent or the rate of inflation, whichever is lower. When the property is sold or transferred, however, its assessment is uncapped and the home is taxed based on its State Equalized Value. This drastic re-assessment creates a pop-up tax that puts a strain on home buyers; in some cases, the pop-up tax doubles the amount of taxes a new homeowner must pay. The pop-up tax especially affects seniors who have lived in their homes for decades and young families who are trying to get started in life.
"Homeownership builds strong communities and schools and a stronger Michigan," LeBlanc said. "Empowering more of our residents to become homeowners will help strengthen our middle class and make the American Dream a reality for our working families. This plan will help us get Michigan moving in the right direction."