In May, Mayor Mike Duggan introduced a new tax plan that would ideally stop speculators from holding onto vacant land and abandoned properties. Over the summer, the city has met with different community groups and landowners to get feedback on the plan. The Land Value Tax plan is now set to go to the Michigan Legislature.
Representative Stephanie Young will introduce the plan next week. In the plan, 97% of Detroit homeowners would see a decrease in their taxes, with the average decrease at 17%. Property taxes on improvements would go down by 14 mills, on par with cities like Southfield, Ferndale, and the Grosse Pointes. Taxes on land would double from 85 to 189 mills. This would be for owners of vacant buildings and vacant land.
This would not affect owners of urban farms and community spaces. Side lots would see an increase of about $30, according to a press release.
For people who have NEZ tax breaks, they could choose whether to keep them or go with the new plan.
The process for the new tax plan start this fall, first with legislative approval, followed by City Council authorizing it on the ballot. It would then go to Detroit voters early next year. If approved, it would go into effect in 2025.
"For far too long, Detroiters have seen blighted property owners get a pass on paying their fair share of property taxes, giving them no incentive to improve their property," said Rep. Young. "This legislation not only levels the playing field but provides savings to homeowners which is a really good thing. While the legislature is taking the first step in this process, it will be the voters of Detroit who will have the final decision as to whether this is the right plan for them."
You can read more about the Land Value Tax plan here.