LANSING – State Representatives Joan Bauer (D-Lansing) and Mark Meadows (D-East Lansing) today unveiled the Homeowner Protection and Stimulus Plan, a package of bills that will help jumpstart Michigan's home sales market by suspending the so-called "pop-up tax" and protect residents from losing their homes when they lose their jobs to outsourcing or downsizing.
"The pop-up is a real burden on new homeowners," Bauer said. "The added expense brought on by this pop-up tax can make economic decisions even more difficult. This plan will help ease the burden during these difficult economic times."
The House Democrats' 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.
"With over 3,000 homes for sale in the capital region, the pop-up serves as a real barrier to home sales," Meadows said. "This legislation and the other bills in the package will hopefully spur home sales and stimulate the local economy."
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, which is 50 percent of its market value.
Ingham County Democrats also are developing a plan that will protect homeowners who have lost their jobs to outsourcing or downsizing from also losing their homes. Under the plan, eligible residents would receive assistance to make their mortgage and tax payments for six months. The assistance would be funded by a second mortgage on the residence. The state would form a public-private partnership with lenders to facilitate the program.