The proposed bill in Michigan seeks to mitigate the economic effects of single-family residential dwellings being acquired and owned by certain entities. It introduces a 4% bulk-buyer transfer surtax on the acquisition, sale, and holding of these properties, effective January 1, 2027. This surtax applies to entities that acquire multiple properties within specified timeframes, with exemptions for mission buyers and properties under affordability covenants. The bill also mandates the Michigan State Housing Development Authority (MSHDA) to certify entities that agree to affordability covenants and outlines the responsibilities of state and local officials in enforcing the surtax and related regulations.

Additionally, the legislation establishes a scale-based surtax on large investors, calculated at 25% on the sum of depreciation and interest expenses claimed for single-family residential properties on their income tax returns, starting January 1, 2027. Certain properties, such as those owned by mission buyers or under affordability covenants, are exempt from this surtax. The bill requires that at least 30% of entry-level single-family residential properties in a project be sold to owner-occupants and prohibits bulk sales of covered properties. Noncompliance with these stipulations can lead to significant penalties, including the repayment of benefits and a ten-year ban on future benefits. The bill emphasizes transparency and compliance through reporting requirements for entities owning multiple single-family residential properties.