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Tuesday, April 15, 2008

More help for home sellers

This week I can report that yet another example of our state government in action may save state home sellers some money - some day. A bill sponsored by Representative Ed Gaffney, Republican from Gross Pointe Farms (pictured at left), provides for home sellers who move within Michigan and allows the seller to retain an additional exemption for up to three years on property previously exempt as the owner’s principal residence if the following circumstances are met:

the property is not occupied,
the property is for sale
the property is not leased or available for lease
the property is not used for any business or commercial purpose

This has the potential to be quite helpful, if only they figure out how to implement it quickly. The deadline for this year’s exemptions in rapidly approaching and so far the townships haven’t received any of the new forms required by the law or instructions on what to do to implement this new law. Why is that not surprising?

I emailed Representative Gaffney and he emailed back that the Department of Treasury in Lansing is working on getting the form out soon. It may not be soon enough to help this year, since May 1st is the deadline to claim the exemption for this year. I have clients who could and would take advantage of this new law, if only there was a way to do so.

This can have a dramatic impact on the ability to sell a house or not, since the non-homesteaded taxes can ad 30-40% to the bill and push some potential buyers out of the debit to equity ratio range that they need in order to buy.

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