WASHINGTON, D.C. – February 6, 2014 – (RealEstateRama) — Today, Governor Snyder shared his 2015 executive budget proposal in front of legislators from both the House and Senate. In his plan, he recommends expanding the Homestead Property Tax credit as a way to provide roughly $102 million in tax relief to an estimated 1.3 million Michigan taxpayers.
Currently, the Homestead tax credit is available to homeowners and renters with incomes up to $50,000. It is calculated by subtracting 3.5% of the taxpayer’s income from the amount of property taxes and then multiplying that by 60%. Renters calculate their credit using 20% of rent.
Governor Snyder’s plan would be retroactive to 2013, meaning that people could see refunds this year. His plan:
Changes the 3.5% income portion down to 3%, allowing a greater percentage of property taxes to be refunded;
Extends the income threshold from $50,000 to $60,000
As a reminder, The Homestead Property Tax Credit is not the same as the Principal Residence Exemption (PRE) Enhancement, which created two deadlines to file for your PRE (June 1st and November 1st). These are two separate filings:
Michigan’s Homestead Property Tax Credit is a way the State of Michigan helps pay some property taxes if you are a qualified Michigan homeowner or renter;
The Principal Residence Exemption (PRE) exempts a residence from the tax levied by a local school district for school operating purposes up to 18 mills.
Much of this confusion may stem from the fact that up until 2004, the PRE was known as the “Homestead Property Exemption”.
The Michigan Association of REALTORS® will continue to keep the membership updated as this proposal winds through the legislative process.