Bill > HB0753

This bill establishes a new method for assessing property taxes for multi-unit rental housing that receives government incentives for low-income housing. The bill requires property assessors to use a specialized valuation approach that considers the property's actual income, operating expenses, and specific capitalization rates that reflect the unique constraints of low-income housing. Specifically, the assessment must adjust the property's market value based on the difference between restricted and unrestricted rental rates, exclude low-income housing tax credits from valuation, and use a capitalization rate that is 50 to 150 basis points higher than standard multifamily property rates. Property owners are required to notify assessors about their property's low-income housing status, including when they first qualify for or lose such status, and must provide necessary documentation. The bill defines "low-income" as earning at or below 80% of the area median income and applies to residential properties with four or more units that receive various government incentives like tax credits, subsidized loans, grants, or rental subsidies. The new assessment method will take effect for tax year 2026 and apply to residential properties developed on or after that date, with initial implementation provisions taking effect immediately.

Government Affairs

https://wapp.capitol.tn.gov/apps/Billinfo/default.aspx?BillNumber=HB0753&ga=114