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Committee hears bill to prevent ‘uncapping’ when property transfers to blood relative and spouse
Summary
Sponsor said House Bill 4,014 would clarify that transfers to a blood relative that include the relative’s spouse should not trigger taxable-value uncapping; homeowners and lawmakers raised concerns about retroactivity, fiscal impact and rising home prices; the committee received multiple written-support cards; no vote was taken.
Representative Slaw presented House Bill 4,014 to the House Finance Committee on March 4, saying the bill would ensure that a transfer of property to a blood relative that also includes the relative’s spouse does not trigger an uncapping of taxable value.
“My bill 4 40 14 would ensure that an uncapping would not take place in the event that there is a spouse as part of the transfer so long as the blood relative is also part of that transfer,” the sponsor said, asking the committee to restore what he described as the original intent of a 2014 law.
The sponsor said the change would be effective back to February 2022, the tax day when the new interpretation began affecting transfers. He said the Treasury Department had not provided an estimate of how many cases would be affected and framed the proposal as correcting an inconsistency rather than creating a broad new exemption.
Committee members and public commenters raised substantive concerns. Representative Breen asked about retroactivity and potential fiscal impact noting the bill text uses the date “on or after 12/31/2021.” The sponsor suggested following up offline about fiscal specifics. Representative Lightner and others described constituent cases, including family farms and transfers between grandparents and grandchildren, where owners said taxable value had increased after a transfer that included a spouse.
Homeowner Sarah Berry testified in support and described how Michigan Compiled Law text and Proposal A’s taxable-value rules can result in steep tax increases for homeowners who bought during a rapid price run-up. “I do support HB 4014,” Berry said, and walked the committee through how taxable value is set and how a one-year uncapping can leave a household paying substantially more in property taxes than neighbors who did not sell and rebuy in the same period. Berry provided multi-page written materials that the committee clerk said would be entered into the record.
The committee recorded two organizational cards in support: Dawn Crandall for the Home Builders Association of Michigan and Brad Ward for Michigan Realtors. Representative Pies noted similar language had been introduced in the previous term and asked whether the bill differed; the sponsor said it was largely identical to the prior filing. The transcript does not record a committee vote on HB 4,014 during this session.
