Grand Rapids Tax Free Renaissance Zone

Tax Free Living

Tax Free Living

Tax Free Living

Michigan has designated virtually tax free zones, called Renaissance Zones. This concept was originated here in Michigan and was such a success that it has been duplicated in other states. In 3 years, the initial 11 tax free zones have spurred more than $315M in private investment.

If you are a homeowner in one of the Grand Rapids Renaissance Zones and you meet the eligibility requirements, then your Grand Rapids city income tax, your Michigan state income tax and your property taxes are waived.

Eligibility requirements include the following:

  • timely filing of personal property returns and Renaissance Zone form

  • timely filing and payment of any state and city income taxes

  • timely filing and payment of state and city employee withholding taxes

  • timely payment of any property taxes

There are several downtown Grand Rapids condos in these tax free zones and if you purchase a property in a Renaissance Zone, it has to be listed as your primary residence. There are different zones as well which begin to phase in taxes at different times. In 2009, taxes begin to phase in. You will start paying 25% of your taxes in 2009 and 25% the following year and so on.

If your property is in an ‘extended Renaissance Zone’, your property taxes don’t begin to phase in until 2015.

Example of Renaissance Zone Savings

Lets say you purchase a downtown condo in Grand Rapids and assuming the sale price of condo is $225,000 and your annual salary is $60,000. (plug in your own salary)  

Estimates for 2008

 

SAVINGS

Property Tax Savings @ 29.7621 millage rate

For a $225,000 condo

 

~$3350.00

City of Grand Rapids Income Tax Savings @ 1.3%

Of $60,000 salary

 

$780.00

State of Michigan Income Tax Savings @ 3.9%

Of $60,000 salary

 

$2340.00

 

TOTAL SAVINGS PER YEAR $$$

 

~$6470

(This is a ballpark figure for information only, I recommend consulting your tax professional). 

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3 Comments

  1. Posted November 24, 2008 at 1:30 pm | Permalink

    This type of incentive makes a lot of sense. People do care about living where its cheaper. Great to know some of the details so we can make better decisoons when we purchase.

  2. Posted November 24, 2008 at 6:27 pm | Permalink

    Thanks Eric. It is important to know as much about your purchase as possible. That is one of the great things about the internet. So much info is available, but you still need a knowledgeable agent to give you an honest appraisal on the various condos.

  3. Posted November 24, 2008 at 6:28 pm | Permalink

    p.s. I sorted out the feed issue, it should be working now.

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