Effective January 1, 2027 | Act 272

What changes

Creates constitutional authority for an optional property tax exemption for blighted or derelict property that has been rehabilitated.

Voter’s perspective

"Blighted" or "Derelict" properties have specific definitions in statute and municipalities routinely designate these properties as part of their procedures governing disposition of neglected, abandoned or adjudicated properties. State law also establishes the definitions, eligibility requirements, duration and procedures for administering the exemption.

Normally, substantial rehabilitation can increase a property's market value and assessment. This amendment allows qualifying rehabilitated property to receive an exemption rather than immediately becoming fully taxable at its improved value, giving a municipality the option of incentivizing private investment where it otherwise might not occur. The assessor would value the property as required and administer the exemption for property approved under the local program.

Financial Impact

It would temporarily reduce or defer the additional property tax revenue that would otherwise result from rehabilitation. Each municipality would weigh the future cost of deferred tax revenue versus the current benefit of potential revitalization of properties in its jurisdiction.