YES! someone is listening. Second home owners should pay lower taxes, they use less city services, and second homes become future retirement residences. Michigan needs boomers to consider it home for retirement…
Owners of vacation homes may get new tax break
Andrew Sawmiller
June 11, 2008 - Certain homes and properties across the state could become exempt from non-homestead local school tax levies under legislation recently introduced in the state Senate.
Senate Bill (SB) 1359 was introduced by Sen. Roger Kahn (R-Saginaw Township) late last month to allow an owner to claim an exemption from any local non-homestead school operating millage for a secondary homestead.
Such exemptions are already allowed in some situations for a person owning two homes, designating one as the principle residence known as a homestead, and the other shielded from higher tax levies in the local area.
Under 1994’s voter-approved Proposal A, local school operating millages were set at 18 mills. Property owners were allowed to obtain an exemption for a principle homestead, under which the maximum local school operating millage would be 6 mills.
A mill is $1 for every $1,000 of a property’s taxable value, which is generally equal to half the property’s market value. The owner of a property with a taxable value of $100,000 ($200,000 market value) pays $100 in taxes under a 1-mill levy.
Already slightly peeved by the inundation of bills seeking to shield people from paying taxes instead of proposals to lower other taxes and cut expenditures, state Sen. Nancy Cassis (R-Commerce, Milford, Highland, White Lake, West Bloomfield, Orchard Lake, Wixom, Walled Lake and Wolverine Lake) said this measure would almost certainly fail to gain her support.
“This is not really to address the foreclosure problem in the state,” she said. “This allows a resident to claim a second homestead and not pay the 18 mills (on that property).
The bill was referred to the Senate Finance Committee, on which Cassis serves as chair, and awaits a hearing before committee members.
Given the current economic climate, some have said the bill is aimed at bolstering home sales in vacation and resort communities. Furthermore, some have said it’s also an effort to prevent current owners from erecting “For Sale” signs, by giving them a tax incentive to keep their secondary homes.
“This could be potentially devastating on communities Up North,” Cassis said. “Those local school taxes play a significant role in those areas for schools to operate.
“Spurring home sales is not a good enough reason to take away a school’s tax money,” Cassis said. “Who is going to make up the money then?”
Cassis and others have speculated that the passage of the bill could potential create an over $100 million loss in school funding statewide, and that’s a conservative estimate, she said.
“I don’t think this is smart tax policy,” she said. “We should be lowering taxes and putting the reigns on spending before turning our attention to vacation homes.”
Lakes area Sen. Deborah Cherry (D-Waterford) said she doesn’t understand the intent of the bill and won’t support it.
“I’m not sure why this bill has some out,” she said. “I don’t know why you would give a tax break on a vacation home. It seems to me that if you’re going to give a break on a vacation home, we should be giving them for people on their regular home, too.
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