LANSING – In a move to prevent more residents from losing their homes to foreclosure, State Representative Jeff Mayes (D-Bay City) joined the Michigan House of Representatives on Thursday and approved a plan that will prevent homeowners' property taxes from going up when the value of their home falls.
"Michigan's hard-working families are struggling every day to make ends meet," Mayes said. "It's completely unfair that as home values fall, our resident's property taxes continue to rise. This system simply doesn't work for our homeowners."
Under current state law a property's taxable value can increase by either 5 percent or the rate of inflation, whichever is less, as long as it is less than the property's assessed value. If the assessed value falls below the taxable value cap, then the home's taxable value is equal to its assessed value.
The plan passed today by the Michigan House would prevent a homeowner from having to pay more in taxes if their home value declines. Instead, the homeowner would pay the same amount of taxes as the previous year, ending the bad practice that is eroding homeowners' equity.
"The most important investment our residents have is their home," Mayes said. "This plan will reverse the cycle of lower home values and higher taxes. It will bring much-needed relief to our residents and help turn our economy around."