EXEMPT FAMILY MEMBERS FROM PROPERTY ASSESSMENT POP-UP
House Bill 4555
Sponsor: Rep. Dale Sheltrown
Committee: Tax Policy
Complete to 9-13-01
A SUMMARY OF HOUSE BILL 4555 AS INTRODUCED 4-17-01
With the passage of Proposal A in 1994, the new school financing system, the state adopted an assessment cap that limits how much the taxable value of a parcel of property can increase from one year to the next. A parcel's assessment cannot increase more than the rate of inflation or five percent, whichever is lower. However, when property is sold, its taxable value returns to 50 percent of market value before the assessment cap is again applied in future years. (This is sometimes referred to as the "pop-up".) Some transactions are exempt from the market-based re-assessment. House Bill 4555 would amend the General Property Tax Act to add an additional exemption. The bill would exempt the transfer of business or residential property with a taxable value of up to $2.5 million that was transferred to a family member. This means, such transfers would not result in the property being re-assessed at 50 percent of market value.
The term "family member" would refer to a spouse; a child, stepchild, or adopted child; a grandchild, step-grandchild, or adopted grandchild; a parent, stepparent, or adoptive parent; a grandparent, step-grandparent, or adoptive grandparent; a brother, stepbrother, or adoptive brother; and a sister, stepsister, or adoptive sister.
MCL 211.27a
_____________________________________________________________________________________________________________________
This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.