HB 71 — LIMIT PROPERTY TAX VALUATION INCREASE

HOUSE BILL 71 55TH LEGISLATURE -STATEOFNEWMEXICO-- STATEOFNEWMEXICO- SECOND SESSION , 2022 INTRODUCED BY Matthew McQueen and Jason C.

Lujan 6This 8document 10may ANincorporate ACTamendments RELATINGproposed TOby TAXATION;a committee, but not yet adopted, as well as amendments that have been adopted during the current legislative session.

PROVIDINGThe Adocument THREEis PERCENTa LIMITATIONtool ONto INCREASESshow INamendments VALUATIONin OFcontext RESIDENTIALand PROPERTYcannot THATbe ISused OCCUPIEDfor ASthe Apurpose PRINCIPALof PLACEadding OFamendments RESIDENCE;to legislation.

PROVIDINGh AAN TENACT PERCENTg LIMITATIONo ONRELATING INCREASESTO INTAXATION; VALUATION OF RESIDENTIAL PROPERTY THAT IS NOT OCCUPIED AS A PRINCIPAL PLACE OF RESIDENCE.

ePROVIDING A THREE PERCENT LIMITATION ON t 17hr BEg ITe ENACTEDi BYk THEINCREASES LEGISLATUREIN VALUATION OF THERESIDENTIAL STATEPROPERTY OFTHAT NEWIS MEXICO:OCCUPIED h r i s AS A PRINCIPAL PLACE OF RESIDENCE;

wPROVIDING A TEN PERCENT h , t, LIMITATION ON INCREASES IN VALUATION OF RESIDENTIAL PROPERTY e u g e b l ne de 18h SECTIONTHAT 1.IS NOT OCCUPIED AS A PRINCIPAL PLACE OF RESIDENCE.

Sectionn 7-36-21.2d NMSAd 1978i (being= Laws= 2000,o =h =l 19] b ,d i a lº Chaptere 10,BE SectionIT 2,ENACTED asBY amended)THE isLEGISLATURE amendedOF toTHE read:STATE OF NEW MEXICO:

r i a= r t e rw 20d "7-36-21.2.m a n o SECTION 1.

LIMITATIONSection ON7-36-21.2 INCREASESNMSA IN1978 VALUATION(being OFLaws a2000, td m m: 21 RESIDENTIAL PROPERTY.-- d r e 22 A.

Exceptb ase providedd ins Subsectionsº Bo throught Fn of= c.221315.2AIC eFebruary s3, k2022 23(6:49pm) thiss section,k residentialm propertye shall be valued at its e a n be 24d currentr ande correctl valueu in[ accordanceA withd theChapter provisions10, ofSection u2, [as theamended) Propertyis Taxamended Code.to read:

[provided"7-36-21.2. that] .221315.2 B.

LIMITATION ON INCREASES IN VALUATION OF RESIDENTIAL PROPERTY.-- A.

Except as provided in Subsections B through F of this section, residential property shall be valued at its current and correct value in accordance with the provisions of the Property Tax Code.

[provided that ] B.

[This limitation]limitation ] C.

For the 2024 and subsequent tax years, the value of a residential property that is occupied as a principal place h of residence in any tax year shall not exceed the higher of one g o t hr hundred three percent of the value in the tax year prior to the g e i k tax year in which the property is being valued or one hundred h r i s six and one-tenth percent of the value in the tax year two h , t, years prior to the tax year in which the property is being e u g e b l e e h valued.

n d d i = = o h D.

For the 2024 and subsequent tax years, the value el t] 17b ,d i a º e of a residential property that is not occupied as a principal wr li n d 18 place of residence in any tax year shall not exceed the higher = =r 19t a l of one hundred ten percent of the value in the tax year prior i a e rw 20d tom the tax year in which the property is being valued or one a tn mo mplace 21 hundred twenty-one percent of theresidence value in theany tax year twoshall dnot rexceed e 22 years prior to the taxhigher yeard inm which: the property is being c e s k 23 valued.

b e d s º o t n = .221315.2AIC February 3, 2022 (6:49pm) s k m e - 2 - e a n be 24d E.r e l u [ A d of one hundred ten percent of the value in the tax year prior to the tax year in which the property is being valued or one hundred twenty-one percent of the value in the tax year two years prior to the tax year in which the property is being valued.

TheE. limitations on increases in value [does] u [ pursuant to Subsections B through D of this section shall not .221315.2 - 2 - apply to:

The limitations on increases in value [does] pursuant to Subsections B through D of this section shall not apply to:

h (a) a change of ownership of the g o t hr property occurred in the year immediately prior to the tax year g e i k for which the value of the property for property taxation h r i s purposes is being determined;

or h , t, (b) the use or zoning of the property e u g e b l e e h has changed in the year prior to the tax year.

n d d i = = o h [B.] F.

If a change of ownership of residential el t] 17b ,d i a º e property occurred in the year immediately prior to the tax year wr li n= dr 18t fore whichw thed valuem ofa then propertyo for propertywhich taxation = = 19 a l purposes is being determined, the value of the property shallfor iproperty ataxation ed r 20 be its current and correct value as determined pursuant to the a t m m: 21 general valuation provisions of the Property Tax Code.

b e d s º o t n = .221315.2AIC February 3, 2022 (6:49pm) s k m e - 3 - e a n e d r e 22l [C.]u G.[ A d purposes is being determined, the value of the property shall be its current and correct value as determined pursuant to the general valuation provisions of the Property Tax Code.

To[C.] assureG. that the values of residential c e s k 23 property for property taxation purposes are at current and e a n b 24 correct values in all counties prior to application of the u [ limitation in Subsection [A] B of this section, the department .221315.2 - 3 - shall determine for the 2000 tax year the sales ratio pursuant to Section 7-36-18 NMSA 1978 or, if a sales ratio cannot be determined pursuant to that section, conduct a sales-ratio analysis using both independent appraisals by the department and sales.

IfTo theassure salesthat ratiothe forvalues aof countyresidential property for theproperty 2000taxation taxpurposes yearare isat lesscurrent thanand eighty-five,correct asvalues measuredin byall thecounties medianprior ratioto application of valuethe forlimitation propertyin taxationSubsection purposes[A to] salesB priceof orthis independentsection, appraisal by the department,department theshall countydetermine shallfor notthe be2000 subjecttax toyear the limitationssales ofratio Subsectionpursuant [A]to BSection of7-36-18 thisNMSA section1978 andor, shallif conduct a reassessmentsales ofratio residentialcannot propertybe indetermined thepursuant countyto sothat that,section, byconduct thea 2003sales-ratio taxanalysis year,using theboth salesindependent ratioappraisals isby atthe leastdepartment eighty-five.and sales.

AfterIf suchthe reassessment,sales theratio limitationfor ona increasescounty infor valuationthe in2000 thistax sectionyear shallis applyless inthan thoseeighty-five, countiesas inmeasured by the earliermedian ratio of thevalue 2004for taxproperty yeartaxation orpurposes theto firstsales taxprice yearor followingindependent theappraisal taxby yearthe thatdepartment, the county hasshall anot salesbe ratiosubject to the limitations of eighty-fiveSubsection or[A higher,] asB measuredof bythis theh mediansection eand tshall 17conduct ratioa reassessment of valueresidential foru » r property taxationin purposesthe tocounty salesso valuethat, orby wthe l2003 ntax dyear, 18the independentsales appraisalt byh theg department.e l i ratio is at least eighty-five.

Thereafter,After thesuch =reassessment, =the 19h ar li s limitation on increases in valuation in this section shall h , e h apply in those counties in the earlier of residentialthe property2004 tax year or t u g e b l e e , gh the first tax year following the tax year that the county has a n d d i = = o h sales ratio of eighty-five or higher, as measured by the median l ] b ,d i a eº r 20ratio of value for property taxation purposes into thissales sectionvalue shallor applye tor a= t me w d m 21a subsequentn taxo yearsindependent inappraisal allby counties.the department.

dThereafter, rthe ed 22m [D.]: H.

Theb provisionsr ofe thist sectionº doo nott applyn c= e.221315.2AIC February 3, 2022 (6:49pm) s k 23m toe residential- property4 for- anye taxa yearn ine whichd ther property e al nu b[ 24A isd subjectlimitation toon theincreases in valuation limitationof residential property for property taxation purposes in Sectionthis 7-36-21.3section ushall [apply NMSAto 1978.subsequent tax years in all counties.

.221315.2[D. - 4 - [E.] I.

] H.

The provisions of this section do not apply to residential property for any tax year in which the property is subject to the valuation limitation in Section 7-36-21.3 NMSA 1978.

[E.

] I.

[(2)] (b) to the spouse of the h transferor that takes effect upon the death of the transferor;

g o t hr [(3)] (c) that creates, transfers or g e i k terminates, solely between spouses, any co-owner's interest;

h r i s [(4)] (d) to a child of the transferor, h , t, who occupies the property as that person's principal residence e u g e b l e e h at the time of transfer;