Nonprofits could seek property tax breaks for affordable rentals

Eligible owners could claim a property tax exemption for qualifying affordable rental housing. More than half of the development’s units must meet the rent and tenant-income limits. Eligible owners are qualifying nonprofits or nonprofit-led joint ventures. Owners must apply each year and meet the requirements for either government-supported or non-government-supported housing. The exemption generally matches the share of units that qualify. Owners meeting the stated federal safe-harbor test may qualify for a full exemption. The provisions would apply to taxes for years beginning on or after July 1, 2026.

Eligible owners could defer property taxes on land held for future affordable rental housing. This covers unimproved land, or improved land that is not occupied when the application is filed, held by an eligible owner for affordable rental housing. The deferred taxes become due if the land is not used for qualifying housing within the allowed period. They are secured by a lien, which is extinguished if the land is used in time. The five-year period runs from the first day of the fiscal year in which the property is classified. This provision would apply to property classified on or after July 1, 2026.

Owners of certain rental housing already receiving a property tax exemption would have to reapply and provide documents. This applies to owners whose low- or moderate-income rental housing property is exempt under the cited provision when the act takes effect. The reapplication counts as an application under the affordable rental housing section. Missing the deadline subjects the property to discovery under the cited property tax law. The reapplication is due by December 31, 2026.