Oklahoma Senator Avery Frix held an interim study examining how affordable housing developments receiving federal tax credits are valued for property tax purposes.
The Low-Income Housing Tax Credit program provides federal tax credits to help finance rental housing. In exchange, participating properties face restrictions on rents and tenant eligibility. Frix said those restrictions should be considered when determining a property’s taxable value.
“If a property has government-imposed restrictions on how it can operate and what it can charge, those restrictions need to be taken into account when determining its value for taxation,” Frix said.
Muskogee County Assessor Ron Dean told lawmakers the county has used a valuation method for nearly 20 years that considers federal housing rents and higher expenses associated with the developments. Frix said the study will help inform discussions over House Bill 4305, which would create an alternative income-based valuation method for qualifying affordable rental housing and exclude state and federal housing tax credits from a property’s fair cash value.
