Michigan’s Goverment Attempts To Completely Destroy Real Estate Values in State
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God help you if you live in Michigan.
When unemployment became onerous and the government was hit with declining tax revenues they decided to try to bolster the manufacturing sector. The passed a new tax law that gave special benefits to those creating new jobs.
As is typical with all governments, instead of lowering spending while the incentives took hold, they moved the burden to a new target. And that target was commercial real estate in the form of a tax hike that is 4 times what they are paying right now.
So instead of having a reliable income from commercial real estate, they have made the market insolvent as there is no economic incentive for buyers to come into the state and the market is in such flux that loans are not being written.
To make matters worse, lending standards are already tight and many commercial loans on properties are unable to be written for those refinancing (many commercial loans are of a 5 year term) so foreclosures are expected to SOAR in the state.
So the powers to be in Michigan are essentially facing a tax roll that is declining as manufacturing is dropping in the state, home prices are falling reducing taxes even further, and now have burdened the commercial real estate market to such a degree that it will soon be in free fall.
Last one out, turn out the lights?
The owners of Michigan’s malls, office buildings and warehouses are getting a huge shock this month as they begin to figure out their tax bills under the state’s new business tax. Some commercial-real-estate developers are seeing 200 to 400 percent increases as the result of the switch to the Michigan Business Tax from the Single Business Tax, which was eliminated last year.
The developers say the extra burden couldn’t come at a worse time.
“The real-estate industry — particularly the income-producing real-estate industry — is facing difficult times without the tax situation,” said Joshua T. Weiner, chief executive officer of Portage-based development firm Meyer C. Weiner Co. via MLive.com
It probably is a really good time to buy real estate - monthly payments are about equal to market rents ...
The part about the inventory is right on but in my area they are mostly low end and beat up ...
I worked for this man, he is a great con man and has done this in more than States then ...
You're right. If you come from Central Jersey (as the Boss and I do), you go to Florida at some ...
Maybe it was kryptonite...
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By Mike ...
I couldn't agree more.
The newspaper has always "stuck" it to the real estate agent with rates that were much higher ...
By the way, homeowners trying to get short sale approval should be aware that lenders are comparing the initial loan ...
Ouch! Thankfully I haven't come across anything like that yet. We normally don't have situations like that in ...
well, the guy was here illegally.
serves him right. 
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Comment by FSBO Louisville on 10 March 2008:
Wow, that totally sucks. What more can I even say?
Pingback by TrafficCourt » Blog Archive » Michigan Jacks Up Taxes on Commercial Property on 11 March 2008:
[...] (Spotted at The Real Estate Bloggers) [...]
Comment by christopher on 30 March 2008:
Commercial property is always a soft target for small minded and short sighted revenue raisers.
Pingback by Michigan Business Tax levies greater impact on real estate firms - — The Real Estate Bloggers on 15 May 2008:
[...] you may want to subscribe to my RSS feed. Thanks for visiting!Back in March I talked about how the Michigan legislature was trying to destroy real estate values in the state with a new tax system. Well, they passed the tax and now it is in [...]