LANSING – House Republicans said Monday they will pursue legislation to delete the real estate transfer tax, stop property taxes from going up when home values are down and make homestead exemptions immediate in an effort to spark home sales in Michigan.

Along with those initiatives, GOP lawmakers also said they want the “pop-up” tax – which occurs when an individual purchases a home and the taxes increase from what the old homeowner paid under Proposal A school funding reform – to be based on community home sales and not an individual home.

They also believe Michigan homeowners stuck with a new home and their old home still on the market should be able to carry homestead exemptions on both properties (HB 4215 ) and homeowners should be allowed up to three private appraisals to be used when appealing the property tax assessed to them by a local unit of government.

The House recently approved legislation that would allow the Michigan State Housing Development Authority to aid homeowners in refinancing their homes to get away from their adjustable rate mortgages.

Rep. Rick Jones (R-Grand Ledge) and Rep. Paul Opsommer (R-DeWitt), who introduced the proposal at a Lansing press conference, said they support the MSHDA package (HB 5443 , HB 5444 , HB 5445 , HB 5446 and HB 5447 ), but they don’t think placing an 18-month hold on the pop-up tax is enough to stimulate the housing market (HB 4440 ).

When the House approved the moratorium measure it also signed off on HB 4441 , which increases the real estate transfer tax during the 18-month moratorium. The Senate has not acted on any of the legislation.

In arguing for their proposal, Opsommer said while home values have continued to fall, property taxes are increasing. This year homeowners will likely see a 2 percent to 5 percent increase and “that doesn’t make any sense,” he said.

Allowing homeowners up to three private appraisals to counter the assessment of the local assessor will provide flexibility for the homeowner, Opsommer said, when the current system doesn’t work like that.

“The unfortunate byproduct of a poor economy is a weak housing market, and Michigan homeowners are especially getting hammered with lower property values and higher taxes. Homeowners who have spent years building equity are seeing it diminish. Our plan is a common-sense approach to provide relief to Michigan homeowners while jumpstarting our economy,” Jones said.

Gongwer News Service asked the lawmakers what they would do to counter the negative effect on state and local government revenues the legislation would create through the deletion or decrease in collected taxes.

The real estate transfer tax comprises about 2 percent of the $12 billion School Aid fund. General property tax collections total about $11.4 billion, according to a 2006-2007 House Fiscal Agency analysis of revenues and distribution.

Jones said while these taxes go to schools, he is adamant the state general fund hold schools harmless from the revenue cut. He said there are more savings and cuts to be found in the general fund budget, like not paying for a new Department of State Police headquarters. However, the state budget will not be paying for the new downtown Lansing headquarters until the 2009 fiscal year.

Opsommer also countered that communities are losing money right now because homes are not being sold and people are having their properties foreclosed on. The Republican initiative will stimulate the housing market and that will help communities with revenue collections, he said.

In response to the announcement, Greg Bird, spokesperson for House Speaker Andy Dillon (D-Redford Twp.), said, “Democrats have long believed that fighting the wave of foreclosures is the best thing for property values and our economic growth. We welcome their ideas to this debate as we know any solution to this matter will need to be bipartisan.”

Rob Campau, vice president for public policy and legal affairs for the Michigan Association of Realtors, said the Republican proposals are good ideas that the association has or will be working on.

Campau said his group has had private discussions with lawmakers and the executive office on addressing the needs of the state’s housing market and expects the issue will be addressed further in 2008. While he said he didn’t know which parts of everyone’s proposals would get to the governor, Campau said he hoped the relevant issues will be a part of that.

The problem this year in terms of stimulating the market was the talking about property tax incentives typically means lowering revenues, and as everyone saw revenue enhancements were the main focus of the budget, he said.

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