 |
ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
low-income housing; tax exemption
Purpose
Modifies conditions for qualification as tax exempt low-income housing.
Background
Laws 2006, Chapter 392 exempts certain rental property and related facilities from property taxation so long as the property is not used for profit and is operated by a non-profit organization. This exemption also applies to properties that are wholly owned subsidiaries of a non-profit organization, including those in limited partnerships where the non-profit organization is the managing general partner.
The
Low-Income Housing Tax Credit provides funding for the development costs of
low-income housing by allowing an investor to take a federal tax credit equal
to a percent of the cost incurred for development of the low-income units in a
rental housing project. Development capital is raised by syndicating the federal
tax credit to an investor or, more commonly, a group of investors.
There is no anticipated fiscal impact to the state General Fund associated with this legislation, but there may be a shift in assessment of property tax if additional exemptions are claimed.
Provisions
1. Adds certain rental property that is owned and operated by a single purpose entity that is wholly owned by one or more non-profit corporations to the properties that may be exempt from taxation if other qualifications are met.
2. Requires that property must qualify under either of the following conditions:
a) the acquisition, rehabilitation, development or operation of the property is financed with tax exempt mortgage revenue bonds or general obligation bonds or is financed by local, state or federal loans or grants, and the amount of rent of the occupants does not exceed the amount of rent that is prescribed by deed restriction or regulatory agreement; or
b) the owner of the property is eligible for and receives federal tax credits for section 42 residential housing, and the amount of rent of the occupants does not exceed the amount that is prescribed by deed restriction or regulatory agreements.
3. Requires that qualifying properties cannot exceed 200 residents.
4. Removes the requirement that the property is used as an assisted living facility for low-income elderly residents.
5. Makes technical and conforming changes.
6. Becomes effective on the general effective date.
Prepared by Senate Research
February 11, 2019
CS/kja