Land value tax plan proposed by Detroit mayor looks to cut down property taxes
(CBS DETROIT) - Mayor Mike Duggan is looking to slash property taxes in his new land value tax plan. The plan was recently announced at the Mackinac Police Conference.
Duggan says the current tax system rewards owners of blighted or vacant properties while placing a heavy burden on homeowners.
"Cut taxes on buildings by 30% and triple the taxes on the land," the mayor said.
For example, a $100,000 home would see a $900 dollar tax cut. The mayor says 97% of Detroit homeowners would see a reduction.
Some residents are concerned about whether city services would see a change.
"I know that creates a revenue shortfall so how are we going to backfill so my question is how do we keep services where they are while cutting property taxes," Detroit homeowner Maurice Telesford told CBS News Detroit.
When it comes to vacant lots throughout the Motor City, taxes would increase by 185%. Duggan noted current vacant lots pay about $30 dollars a year in taxes.
"The average bill on a vacant lot in Detroit -- $30 bucks a year," Duggan said, adding that the city has about 30,000 neglected vacant lots.
Duggan said the tax plan would help make new housing developments in the city more affordable.
"We [Detroit] have a lot of vacant lots in the city or spots that could be developed, and if that's what lights a fire under their tail to make things a bit more beautiful, I support that," Telesford said.
The proposal will head to the state legislature for approval, and voters could see the tax plan on the Detroit ballot next February. If approved, the program would be phased in over three years starting in 2025.