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 effect.

Take a wild guess who it is going to hurt the worst. You got it, landlords and real estate firms.

So a state with a worse than moribund real estate picture is now adding a huge tax to those who are willing to buy real estate. There are some real rocket scientists in the Michigan Statehouse these days.

The first filings of estimated liability under the MBT were due in April, and some real estate firms are seeing six- or eight-fold increases in taxes, said Kirk Profit, lobbyist for Government Consultant Services Inc.

He’s been retained by some local firms to push for changes in the tax, which replaced the Single Business Tax this year.

Profit said the credits in the MBT for personal property, payroll and research and development don’t benefit property owners and managers.

“There’s not a lot of that activity,” he said.

So you have real estate that is dropping like a rock and raising taxes by 6–8 times for the landlords that might be thinking about buying real estate in the state? Smart, huh…

“It’s going to take away a lot of your profit,” he said. The temptation is to pass along those costs to tenants through higher rents, but that might not be possible today, Chaconas said.

“I’m not sure you can get away with that because the market is soft,” he said. Profit predicted that will be the only option for many landlords. “You’ll probably see a dramatic increase in rents,” he said. via MLive.

Sure, increase rents from what. The economy in Michigan is in the toilet, real estate is not far behind, and you have a social welfare system that is bankrupting the state.

No wonder why we have so many former Michigan residents living in Georgia now, they just might be the smart ones.

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