BRIEF SUMMARY: House Bill 5124 amends the General Property Tax Act to reduce the redemption amount for delinquent taxes on a parcel of property under certain circumstances. Specifically, until July 1, 2023, the bill applies eight new provisions to property for which delinquent property taxes remain unpaid, including property forfeited for delinquent taxes, located in a
local unit of government that is participating in a payment reduction program under the bill.
FISCAL IMPACT: Counties choosing to reduce the amount required to redeem tax-foreclosed property under provisions of the bill would realize reduced revenue unless reducing the amount owed would result in payments that, but for the provisions of this bill, would not have been received. The provisions of the bill are permissive and would not require action by a county
treasurer. The net change in revenue for any local unit of government would depend on the scope of use by each county treasurer and cannot be estimated. The provisions of the bill pertaining to the Department of Treasury could increase administrative and oversight costs for the department. An estimate of the costs is not available, but they are likely to be negligible and absorbed under current appropriation levels.
THE APPARENT PROBLEM: During the Great Recession, Michigan saw a surge in home foreclosures, as many homeowners could no longer pay off their delinquent property taxes. Many people in lower income brackets lost their homes outright; at the same time, many municipalities were not made whole for the delinquent property taxes, since the property’s value had dropped substantially and there was nobody left to pay off the taxes. As a result, both homeowners and local governments lost out, especially counties of the Detroit Metropolitan Area such as Wayne County. While the number of foreclosures has dropped since the Great Recession, many of these counties still have over 1,000 foreclosure cases every year. Legislation has been proposed to reduce the redemption amount for delinquent taxes under certain circumstances.
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