When Michigan kids head back to school in a few weeks, some districts may have more money to spend on them thanks to a newly closed property tax loophole.
Local school districts in Michigan are funded in part by non-homestead property taxes. That’s a tax collected on businesses, second homes, and rental properties.
Under the law before, people with these properties in Michigan were claiming them as homesteads, to avoid paying the taxes. If they were caught, they could just say they had made a mistake pay three years of back taxes and get away with the rest. (Michigan law states back taxes can only be collected three years back, even if taxes haven't been paid for longer)
Now, that the loophole has been closed anyone caught claiming two homesteads has to pay three years back taxes, plus a $500 fine. That money will be seen in local school districts starting this school year.
Berrien County Treasurer Bret Whitkowski said that money is solely for public education.
“The money does not go to the county general fund, it does not go to your local government. It does not go for anything other than it goes 100 percent of the tax that is collected goes toward public education.”
Whitkowski said the amount collected through this tax in Berrien County went from $15,000 to $30,000 a month at the height of the loophole, to $142,000 a month in 2018. And all that money is going directly to schools.
