Will a temporary freeze on the MI "pop-up" tax help fuel the market?

Recently the Senate passed several bills that would provide tax credits to help offset increasing Michigan property taxes.  Property taxes can increase dramatically upon scheduled reassessment.  Buyers could avoid this “pop-up” tax by purchasing a primary residence between April 1, 2008 and January 1, 2011.  Last year the tax-free window created was 18-months in a bill drafted by the House of Representatives.  These two legislative entities are expected to collaborate in coming weeks to finalize the effort to carve something into Michigan history.

The Michigan Association of Realtors is looking forward to some simple solutions for the real estate consumer.  You shouldn’t have to be a tax expert to understand the benefits.  Real estate sales averages continue to be down somewhat – this in large part to foreclosed home discounts. There seems to be mixed reviews on the idea of a property tax moratorium.  Some believe people may become trapped in their existing homes while others think the initiative would help to move inventory and boost prices.  Still others believe the move wouldn’t affect the economy favorably either way.

Home builders are worried that the moratorium could hurt the sale of new homes as they wouldn’t receive any preferential tax treatment from the legislative committees.

In all, many are looking for bold tax reforms to bring Michigan to competitive national levels.  Do you have thoughts about the proposed moratorium?  Let us know by leaving a comment!

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