Bill > HB585

This bill modifies how property tax assessors evaluate commercial real properties that have been developed under Section 42 of the Internal Revenue Code, which relates to low-income housing tax credits (LIHTC). The bill requires property assessors to consider specific factors when valuing these properties, including the impact of rent restrictions and affordability requirements. Assessors may now use the replacement cost approach only if it produces a lower value than the income approach and accurately reflects the property's value. The bill also introduces a new requirement for the Department of Housing and Community Development to notify the State Department of Assessments and Taxation within 30 days of closing and executing a regulatory agreement that a commercial property has been awarded a low-income housing tax credit. Significantly, the bill removes previous language that allowed for specific adjustments to the property's capitalized income and prohibits considering tax credits as attributable income. The legislation will take effect on June 1, 2025, and will apply to all taxable years beginning after June 30, 2025, providing a clear timeline for implementation of these new valuation guidelines for low-income housing properties.

Budget and Finance

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB0585?ys=2025RS