We made it! Tax Reform passed in Washington. Overall, the industry in our area does well with the proposal as passed. There will be some follow up legislation in the coming months, but until then, NAR has some great information created to help answer questions about the proposal’s impact on ownership and those that work within the industry.
Your NAR member committee process has completed work on structuring its 2018 policy priorities. There certainly are a few big issues in Washington needing attention that we hear about on the evening news, but hopefully some of these pro-real estate, pro-property owner, pro-Realtor® member items will rise to the top (in particular as the waters recede from our recent heavy rains and flooding in parts of West Michigan….. yes, NFIP needs attention!).
In Lansing, things are stable. Governor Snyder presented his last State of the State address, recently sent his 2019 budget proposal to the Michigan Legislature for consideration, and less than 10 months remain in his tenure given the term limit mandate. Extra revenue due to increased economic activity is being dumped into roads. Most people in Lansing are term-limited. Folks are looking to gear up for a BIG election year. Don’t expect a lot of heavy policy issues to move this year.
DO expect a hearing soon in the House regarding the First-Time Homebuyer Savings Account legislation. We’ll be engaging the public more about this issue to help see passage this year given that the Senate has passed the legislation already. We are continuing to advance the debate on short-term property rental rights although no hearing is scheduled for the issue yet. And hopefully soon, State Rep. and Realtor® appraiser member from Kalamazoo Dave Maturen will have his legislation pass that clarifies the transfer tax refund being applicable to new construction property.
We’ll be gearing up for candidate interviews next month and I look forward to working with MCAR again through this important process. Long-term, it will help us be successful on many industry issues such as the ones below:
Realtors® won the battle as a sweeping federal tax reform proposal is now law. The deductibility of state and local property taxes and mortgage interest remains and option to incentivize ownership. The 1031 like-kind exchange provision remains for real property and we defeated potentially horrible changes impacting sellers from a capital gains perspective. At every step of legislative action, the bill became more favorable in its treatment of real estate.
Early and On-Time, Balanced Budgets
Your Association drives the conversation in government toward early, on-time, balanced budgets with a continued look at policy reforms to more efficiently operate. Encouraging these levels of cooperation in the legislative process keeps governmental officials from entertaining proposals to regulate a property owner, increase the cost of the transaction, or tax those that work within the industry.
First-Time Homebuyer Savings Accounts
Legislation that will create a tax-free savings account for a first-time Michigan principal residence purchase has passed the Senate and we are working to schedule a hearing in the House soon. Working in the spirit of how one can currently save for educational expenses and realize tax benefits, three other states have successfully implemented this concept. This tool will help support our market long-term given student loan debt concern facing potential buyers.
Short-Term Property Rental Rights
Legislation has been introduced to stop a local government from preemptively banning a property owner from renting property on a short-term basis. Rental rights are key to the value of property, the economic vitality of Michigan communities, the culture of our state, and are a crucial private property right.
National Flood Insurance Program (NFIP): Extension, Reform, and Map Quality
Congress must reauthorize NFIP to continue providing flood insurance after March 23. We need to reduce uncertainty in the real estate market by including reforms that realize sustainable private market options for clients that need flood insurance to finance a transaction. Improved flood map accuracy will support the property owner, industry professionals, and program efficiency.
Michigan Real Estate Transfer Tax Exemption (u)
Governor Snyder signed legislation sponsored by Realtor® member and State Rep. Dave Maturen in 2015 to streamline the declining value exemption, applying to those selling a principal residence with an SEV lower as compared to SEV upon purchase. Legislation clarifying the intent of the law and its application toward new construction is moving through the legislative process.