Follow-up on the "Pop-Up" Tax

Many of us were hopeful that our State legislators would put a moratorium on the "pop-up" tax to help give a boost to home sales. It now appears the bill is going nowhere fast.

"I wouldn't say it is dead, but it is definitely on the slow track," state Sen. Nancy Cassis, R-Novi, said. "It would cost the state too much."

The state House had earlier passed House Bill 4440 to suspend the pop-up tax for anyone buying a house from March 1 to Sept. 1, 2008. It would basically let the new buyer inherit the property tax rate of the current owner rather than suffer a re-assessment, which typically adds thousands of dollars to annual property taxes.

"The treasury department said it would cost $90-$100 million over three years and Cassis adjourned the meeting," said Bill Martin, chief executive officer of the Michigan Association of Realtors. "It was over that fast. The state didn't do a dynamic study, which takes more talent. If it had, the Senate would have heard that the housing market can stimulate the entire economy."
Martin said the average home buyer spends $40,000 within a year on items such as furniture, wallpaper and wood to build that new deck. Add all that up, and the $90 million deficit could turn into a profit for area businesses, he said, still hopeful something will get done before the spring selling season ends.

"It's basically dead, but that could change tomorrow given the situation in Lansing," Martin said. "It's the craziest I've ever seen it."

With all our budget issues, the pop-up tax isn't a top priority right now, Martin said. "The Association of Realtors estimates the high property taxes in Michigan decrease home buying power by about $50,000, meaning sellers get less for a house, too. I know in our market area, both sellers and buyers are constantly complaining about the high taxes, particularly within the City limits of Ann Arbor, Saline, Ypsilanti, and Milan.ovtakj