Bill > SB0539

This bill establishes a new process for how multi-unit rental housing that receives government incentives for restricting rents to low-income renters is assessed for property taxes. The assessment will use methods that consider the actual income and expenses of the property, following professional appraisal standards, and will adjust the property's value based on the difference between restricted and unrestricted rental rates. Importantly, the bill excludes the value of low-income housing tax credits, which are federal or state benefits designed to encourage the development of affordable housing, from the property's valuation. It also specifies how the capitalization rate, a factor used in property valuation, should be determined, requiring it to be higher than for unrestricted properties and based on various risk factors. Property owners must notify tax assessors if their property becomes or ceases to be subject to these low-income restrictions, and failure to do so can result in penalties. The bill defines "government restriction on use" broadly to include various incentives like tax credits, loans, rent subsidies, and grants, and clarifies that "low-income" means earning at or below 80% of the area median income. This new assessment method will apply to multi-unit rental housing with four or more units, excluding assisted living facilities and duplexes or single-family homes unless they are part of a larger restricted property, and will take effect for tax years beginning in 2026.