First off, I wish the entire MCAR family a very Merry Christmas!
It’s been a fast and furious fall into the Holiday season. While we continue to work on many of the issues discussed during the October General Membership Meeting with Michigan Realtors® Director Michael Bass, we have seen some progress on a couple items.
The First-Time Homebuyer Savings Account legislation was unanimously approved and sent to the Senate Floor on November 7
. Michigan Realtors® thanks Senators Peter MacGregor (R-Rockford) and Ken Horn (R-Frankenmuth) for their strong sponsorship of this innovative legislation. Look for it to pass the Senate before year end. The House will take it up as the snow melts.
These bills would create a new incentivized savings vehicle to support homeownership rooted in Michigan, placing a focus on talent retention and smart savings. The legislation would allow an account holder to begin saving for the purchase of a first-time principle residence in Michigan, while receiving meaningful state income tax incentives to spur growth on that savings.
Michigan Realtors® sees very valuable uses for this savings vehicle:
- For the parent, grandparent, or guardian, the ability to begin saving to the benefit of a minor-dependent towards their first-time home purchase rooted in Michigan;
- For the individual in high school, college, or beyond, that begins saving for themselves with the goal of homeownership rooted in Michigan;
- For the individual that has not owned a principle residence in the previous 3-years, whether due to financial hardship, foreclosure, or credit recovery, providing a new savings tool for homeownership.
A First-Time Homebuyer Savings Account holder could receive up to 20-years of investment deductibility off the account holder’s state income tax, while allowing the interest on the account to grow tax-free. Under the legislation, the annual deductibility thresholds are up to $5,000 for a single tax return and $10,000 for a joint filing.
You’ll be hearing more about this via an IMF expenditure and a public awareness campaign in 2018 as well.
It’s likely that tax reform passes in some form before Christmas. Depending on the market you are working in, the variables associated with that transaction, the needs of the particular clients…..there could be some good with the proposal passing, no real change, but in some markets and depending on the variables there could be issues. The Conference Committee is working to iron out differences between the House and Senate proposals. As time goes by, the changes made are becoming more favorable to treatment of ownership, but NAR is still working on concerns that have been presented. Honestly, every 36 hours something changes, so please check in with the main website linked above.
Thank you for your participation with RPAC and the Calls to Action this year. To President Satterlee and the Capitol Day attendees, thank you for visiting! Together, the MCAR membership is helping set the example of participation and support of our advocacy programs.
2018 is a big year, in Michigan politics. Let’s be ready.
West Michigan Public Policy Director