LANSING – State Representatives Richard E. Hammel (D-Mt. Morris Township) and Richard LeBlanc (D-Westland) have introduced a plan to relieve the property tax burden on Michigan homeowners by ending the unfair practice of increasing the taxable value of their home even when their home's market value decreases.
"Increasing the taxes on property that is worth less than before makes no sense and puts too much of a burden on our homeowners," Hammel said. "This plan would simply make sure that if a home's market value decreases, the property's taxable value will not increase. Michigan's overall tax structure needs to be improved, and my hope is that this proposal will get that discussion going."
Currently, a home's taxable value can increase annually by 5 percent or the rate of inflation, whichever is less, as long as ownership does not change hands. The actual market value of many homes in Michigan is dropping, though, due to the struggling economy and sagging real estate market. This market decline has resulted in many homeowners paying increased property taxes even as their property's market value has fallen.
The plan proposed by Hammel and LeBlanc would change the law to guarantee that when a homeowner's assessed State Equalized Value (SEV) decreases, the property's taxable value will not increase. Their legislation would have to be approved by the voters to take effect.
"Enacting this property tax reform will make our system fairer and help thousands of working families who are at risk of foreclosure," LeBlanc said. "We have to do everything we can to support Michigan's hard-working residents during these tough times. This change is good for homeowners and it's good for Michigan."