Legislative Analysis
Phone: (517) 373-8080
INCREASE HOMESTEAD PROPERTY TAX CREDIT http://www.house.mi.gov/hfa
FOR DISABLED VETERANS WHO RENT
Analysis available at
House Bill 4724 (H-1) as reported from committee http://www.legislature.mi.gov
Sponsor: Rep. Natalie Price
Committee: Tax Policy
Complete to 10-14-23
SUMMARY:
House Bill 4724 would amend the Income Tax Act to increase the homestead property tax
credit for disabled veterans or their widows and widowers who rent or lease a homestead. 1
Currently, the homestead property tax credit is available to individuals who rent or lease
and whose total household resources fall below a certain threshold. The credit is calculated
based on the amount by which 23% of their gross rent paid during the tax year exceeds
3.2% of the taxpayer’s total household resources and is capped at an amount that is adjusted
for inflation annually ($1,600.00 for the 2022 tax year). Taxpayers who rent or lease a
homestead that is subject to a service charge in lieu of ad valorem taxes under the State
Housing Development Authority Act of 1966 2 are entitled to a credit based on the
difference between 10% of gross rent paid and 3.2% of total household resources.
Under the bill, a disabled veteran or their widow or widower would be able to claim a
credit equal to 23% of their gross rent paid that tax year. If the disabled veteran or their
widow or widower rents or leases a homestead that is subject to a service charge in lieu of
ad valorem taxes under the State Housing Development Authority Act, they would be
entitled to a credit equal to 10% of the gross rent paid that tax year, or equal to a higher
percentage of gross rent if they have documentation that the homestead is subject to a
service fee of more than 10%. These credits would not be subject to the cap set for other
taxpayers.
Disabled veteran would mean a resident of this state who meets one of the
following criteria:
• Has been determined by the U.S. Department of Veterans Affairs (VA) to
be permanently and totally disabled as a result of military service and
entitled to veterans’ benefits at the 100% rate.
• Has a certificate from the VA certifying that the veteran is receiving or has
received monetary assistance due to disability for specially adapted
housing.
• Has been rated by the VA as individually unemployable.
MCL 206.506 et. seq.
1
Homestead is defined in section 508 of the act: http://legislature.mi.gov/doc.aspx?mcl-206-508
2
http://legislature.mi.gov/doc.aspx?mcl-125-1415a
House Fiscal Agency Page 1 of 2
BRIEF DISCUSSION:
Supporters of the bill argue that disabled veterans or their widows and widowers who own
a home are already entitled to a 100% property tax exemption and that the bill will simply
extend the same treatment to those who rent.
FISCAL IMPACT:
Given the language in the bill, it can be expected that individual income tax revenue would
decline by approximately $18 million to $22 million on an annual basis. To the extent that
the credit increases a taxpayer’s refund, the impact will be borne entirely by the general
fund. However, if the credit results in lowering or completely offsetting a taxpayer’s annual
payment, roughly 25% of the impact will fall on the School Aid Fund, with the remainder
coming from the general fund.
POSITIONS:
A representative of the Department of Treasury testified with a neutral position on the bill.
(9-13-23)
The following entities indicated a neutral position on the bill (9-13-23):
• Department of Military and Veterans Affairs
• American Legion Department of Michigan
Legislative Analyst: Alex Stegbauer
Fiscal Analysts: Ben Gielczyk
Jim Stansell
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
House Fiscal Agency HB 4724 (H-1) as reported Page 2 of 2


Statutes affected:
Substitute (H-1): 206.506
House Introduced Bill: 206.506
As Passed by the House: 206.506