Michigan House Bill HB5865

Michigan 2023-2024 Regular Session

• Introduced: 6/26/24
• Refer: 6/26/24

Caption

Property tax: assessments; sales of certain deed-restricted properties; prohibit the use of as comparable sales for assessment purposes in certain circumstances. Amends sec. 27 of 1893 PA 206 (MCL 211.27).

Impact

If enacted, HB 5865 would significantly impact how assessors evaluate the true cash value of nonprofit housing properties. By excluding certain deed-restricted sales from consideration as comparable sales, the legislation may lead to more favorable assessment outcomes for low-income housing, potentially lowering the taxable value of properties transferred from charitable organizations to eligible low-income individuals. This move aims to encourage more affordable housing opportunities by reducing property tax burdens on such transactions.

Summary

House Bill 5865 seeks to amend section 27 of the general property tax act to prohibit the use of sales of certain deed-restricted properties as comparable sales for assessment purposes. This bill aims to clarify the definition and considerations for determining the 'true cash value' of properties owned by charitable nonprofit housing organizations, primarily when sold to low-income households. The bill defines 'true cash value' as the usual selling price under typical conditions instead of forced or auction sales.

Contention

The bill has raised some discussions regarding its implications for property tax assessments within local jurisdictions. Supporters argue that the exclusion of these sales will protect low-income families from higher tax assessments that do not accurately reflect market value. However, opponents may voice concerns about the potential loss of revenue for local governments reliant on property taxes, questioning whether the benefits of incentivizing low-income housing outweigh the fiscal impacts. Furthermore, discussions about the nuances of assessing properties in differing economic conditions could emerge as points of contention.

Additional_information

The bill stems from ongoing efforts to improve housing accessibility for low-income populations through charitable organizations. Proponents believe that by refining how properties are assessed, they can help sustain and increase the number of affordable housing options within the state, addressing broader economic inequality.