Homestead Property Tax Credit

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Sarah Anthony
Senator | Lansing, MI

Homestead Property Tax Credit

Idea Category: 2025 Ideas Challenge, Economic Opportunity & Affordability

2025 Ideas Challenge Entry

The bill would expand eligibility for the Michigan Homestead Property Tax Credit (HPTC). The HPTC, first established in 1968, is an existing refundable credit available to eligible Michigan residents who pay high property taxes or rent. It can be a meaningful offset to property taxes especially in high property tax communities. Despite the addition of indexing, several eligibility factors limit how much households can receive, and the full credit remains unavailable for households with income over $60,700 regardless of filing status (single/married). This limits far too many working and middle-class households who either rent or own their homes.

The proposed legislation would expand the credit by:

Raising the maximum credit from $1,800 to $2,000, with inflation adjustments.
Lowering the property tax threshold from 3.2% to 3.0% of income.
Creating a separate, higher income threshold for married joint filers.
Increasing the overall income limit by $10,000.
Adjusting the rent percentage counted toward eligibility from 23% to 25%.

These updates would provide meaningful relief to more residents, helping them manage rising housing costs and remain in their homes.

Impact or how it will be measured:

This bill supports the theme of providing relief for housing costs for renters and homeowners alike. This proposal would extend the credit to nearly half a million filers based on the various adjustments made in the bill.