The bill amends the Income Tax Act of 1967, specifically section 520, to update the property tax credit provisions for homesteads in Michigan. Key changes include the adjustment of the taxable value cap for eligibility from $135,000 to $196,500, effective for the 2026 tax year and beyond. Additionally, the bill stipulates that this cap will be adjusted annually based on the United States House Price Index. The language has been modified to clarify that the property taxes used for credit computation must not exceed the amount levied for one tax year, and it specifies that claimants who rent or lease a homestead can claim a credit based on a percentage of their gross rent.

Further amendments include the introduction of new definitions and adjustments to the credit calculation for senior citizens and those receiving state assistance. The maximum credit allowed has been increased from $1,200 to $1,500 per year, with provisions for future adjustments based on the Consumer Price Index. The bill also establishes penalties for discrimination against renters who claim the credit, ensuring that they are not charged higher rents due to their credit status. Overall, the bill aims to enhance property tax relief for homeowners and renters while ensuring equitable treatment in the rental market.

Statutes affected:
House Introduced Bill: 206.520