March 2007 Field Report -
Southeast Michigan
By: Tony Daunt – Southeast Michigan Field Director
Call To Action Response Impressive
Since last month’s report to you, the Michigan Association of REALTORS® has initiated two Call To Action alerts in response to the introduction of legislation that would make Governor Granholm’s proposed tax on services a reality. Your response has been overwhelming! More than 10,000 members have used the opportunity to contact their state legislators and inform them of the devastating effects this tax would have on the real estate market. Whether you did this via email, phone or a letter, I would like to thank you for being involved and expressing your opposition. Our message was heard loud and clear in Lansing and as it now stands, the governor doesn’t even have enough votes within her own party to pass this legislation.
However, things can change quickly in Lansing and we must continue to stay informed and be ready to take whatever steps are necessary to stop this legislation from going forward. To make a military comparison, I’d say the fight is over government spending, this battle deals with a tax increase on your industry and we are currently stalemated. We cannot afford to let our guard down or we risk being outflanked and overrun. I urge you to continue paying close attention to any emails from MAR and your local association and to make a concerted effort to inform your family, friends and associates about the governor’s tax proposal. Public support for the Granholm tax increase currently stands at a mere 39 percent and continues to decline the more people learn about it. We will do our part as staff to fight this tax on your behalf and keep you informed as to developments and alternatives.
Update: “Pop-Up” Tax Moratorium
Believe it or not, there have been some positive developments for your industry coming from the state legislature. House Democrats introduced legislation (HB 4440) on March 8th that places an 18 month moratorium on the “pop-up” tax. The bill would leave property taxes capped when a principal residence was transferred between March 1, 2007 and September 1, 2008 and would only apply in cases where the residence was to continue to be a principal residence for the new owner. In other words, the buyer would inherit the current owner’s taxable value and avoid the pop-up that brings taxable value in line with the state equalized value, or SEV. The second part of this deal, HB 4441, would raise the transfer tax from .75 percent to .85 percent for any principal residences that were transferred from May 1, 2007 to December 31, 2008. Although MAR has always been opposed to the transfer tax and any increases in it, we are willing to accept this temporary increase of .10 percent because of the net benefit we gain by freezing the “pop-up” tax for those 18 months.
If you’ll recall last month’s article, I mentioned that this legislation was in the works and that it was a priority for House Speaker Andy Dillon. Because of the importance of moving this legislation quickly, it was passed by the state house on March 14th (only six days after its introduction) and referred to the Senate Finance Committee. We have informed all parties involved that we would rather see this legislation dead on the governor’s desk within two weeks than have it still in limbo after two months. Even though the legislation is retroactive to March 1st, we don’t want the buying public to be under the impression that they should wait a few months for a better deal and have them backing out of deals that are currently in the works.
If you have any questions about either of these legislative proposals and where MAR stands on them, please do not hesitate to contact me. I have been traveling southeast Michigan the past month giving presentations on these issues and will be happy to do so for as long as it takes.
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March 2007
Field Report
• Field Report
Tony represents:
• Ann Arbor Area
• Dearborn
• Detroit
• CBOR
• Down River
• Grosse Pointe
• Lenawee County
• Livingston County
• MCAR
• Monroe County
• North Oakland County
• Western Wayne Oakland County
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