SB 186 — MULTIFAMILY HOUSING VALUATION

SENATE BILL 186 57TH LEGISLATURE -STATEOFNEWMEXICO-- STATE OF NEW MEXICO - FIRST SESSION, 2025 INTRODUCED BY Peter Wirth and George K.

Muñoz andThis Joshuadocument N.may incorporate amendments proposed by a committee, but not yet adopted, as well as amendments that have been adopted during the current legislative session.

HernandezThe 6document 8is 10a ANtool ACTto RELATINGshow TOamendments PROPERTYin TAX;context and cannot be used for the purpose of adding amendments to legislation.

CREATINGh AAN SPECIALACT METHODg OFo VALUATIONRELATING FORTO CERTAINPROPERTY MULTIFAMILYTAX; HOUSING.

14CREATING BEA ITSPECIAL ENACTEDMETHOD BYOF THEt LEGISLATUREhr OFg THEe STATEi OFk NEWVALUATION MEXICO:FOR CERTAIN MULTIFAMILY HOUSING.

SECTIONh 1.r i s h , t, BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Sectione 7-36-15u NMSAg 1978e (beingb Lawsl 1975,e Chaptere 165,h SectionSECTION 2,1. as amended) is amended to read:

eSection t7-36-15 17NMSA "7-36-15.1978 (being Laws 1975, n d d i = = o h Chapter 165, Section 2, as amended) is amended to read:

METHODS OF VALUATION FOR PROPERTY TAXATION w l n] db 18,d PURPOSES--GENERALi PROVISIONS.-- = = 19 a lº A.e "7-36-15.

PropertyMETHODS subjectOF toVALUATION valuationFOR forPROPERTY propertyTAXATION r i a= e r 20t taxatione purposesw underd thism article of the Property Tax Code a tn mo mPURPOSES--GENERAL 21PROVISIONS.-- shall be valued by the methods required by this article of the d rm e: 22 Property Tax Code whether the determination of value is made by c e s k 23 the department or the county assessor.

Theb samee ord similars eº ao t n b= 24.230025.3AIC methodsMarch of5, valuation2025 shall(11:05am) bes usedk form valuatione ofe thea samen ore ud [r similare kindsl ofu property[ forA propertyd taxationA. purposes.

.230025.3Property B.subject to valuation for property taxation purposes under this article of the Property Tax Code shall be valued by the methods required by this article of the Property Tax Code whether the determination of value is made by the department or the county assessor.

UnlessThe asame method or similar methods of valuation are authorized in Sections 7-36-20 through [7-36-33] 7-36-34 NMSA 1978, the value of property for property taxation purposes shall be itsused marketfor valuevaluation as determined by application of the salessame of comparable property, income or costsimilar methodskinds of valuationproperty orfor anyproperty combinationtaxation ofpurposes. these methods.

B.

Unless a method or methods of valuation are authorized in Sections 7-36-20 through [7-36-33 ] 7-36-34 NMSA 1978, the value of property for property taxation purposes shall be its market value as determined by application of the sales of comparable property, income or cost methods of valuation or any combination of these methods.

(1) shall apply generally accepted appraisal h techniques;

and g o t hr (2) in determining the market value of g e i k residential housing, shall consider any decrease in the value h r i s that would be realized by the owner in a sale of the property h , t, because of the effects of any affordable housing subsidy, e u g e b l e e h covenant or encumbrance imposed pursuant to a federal, state or n d d i = = o h local affordable housing program that restricts the future use el t] 17b ,d i a º e of the property or the resale price of the property or would wr li n= dr 18t otherwisee prohibitw thed ownerm froma fullyn [benefitting]o =otherwise =prohibit 19the aowner l benefiting from anyfully enhanced[benefitting value] ofd them property.:

Asb usede ind is º o t n = .230025.3AIC March 5, 2025 (11:05am) s k m e - 2 - e a n e d r 20e thisl paragraph:u [ A d benefiting from any enhanced value of the property.

aAs tused min mthis 21paragraph: (a) "subsidy, covenant or encumbrance d r e 22 imposed pursuant to a federal, state or local affordable c e s k 23 housing program" includes those imposed by a nonprofit entity e a n b 24 approved by a governmental entity as a qualifying grantee u [ pursuant to the Affordable Housing Act;

and(a) .230025.3"subsidy, -covenant 2 - (b) "residential housing" means any building, structure or portionencumbrance thereofimposed thatpursuant isto primarilya occupied,federal, orstate designed or intendedlocal primarilyaffordable forhousing occupancy,program" asincludes athose residenceimposed by onea ornonprofit moreentity householdsapproved andby anya realgovernmental propertyentity thatas isa offeredqualifying forgrantee salepursuant orto lease for the constructionAffordable orHousing locationAct; thereon of such a building, structure or portion thereof.

"Residentialand (b) "residential housing" includesmeans congregateany housing,building, manufacturedstructure homes,or housingportion intendedthereof tothat provideis orprimarily providingoccupied, transitionalor designed or temporaryintended housingprimarily for homelessoccupancy, personsas anda commonresidence healthby care,one kitchen,or dining,more recreationalhouseholds and otherany facilitiesreal primarilyproperty that is offered for usesale byor residentslease for the construction or location thereon of such a residentialbuilding, housingstructure project.or portion thereof.

C."Residential housing" includes congregate housing, manufactured homes, housing intended to provide or providing transitional or temporary housing for homeless persons and common health care, h kitchen, dining, recreational and other facilities primarily u » r for use by residents of a residential housing project.

Dams,t reservoirs,h tanks,g canals,e irrigationl wells,i installedC. irrigation pumps, stock-watering wells and pumps, similar structures and equipment used for irrigation or stock-watering purposes, water rights and private roads shall not be valued separately from the land they serve.

TheDams, reservoirs, tanks, canals, irrigation h r i s wells, installed irrigation pumps, stock-watering wells and h , e th 17pumps, foregoingsimilar improvementsstructures and rightsequipment shallused befor consideredirrigation asor wt lu ng de 18b appurtenancesl toe thee land, theygh serve,stock-watering purposes, water rights and theirprivate valueroads shall ben =d =d 19i a= l= includedo inh thenot determinationbe ofvalued valueseparately offrom the land.land they serve.

The l ] b ,d i a º r foregoing improvements and rights shall be considered as e r 20= D.t e w d m a n o appurtenances to the land they serve, and their value shall be d m :

Theb departmentr shalle adoptt regulationsº too a t mn m= 21.230025.3AIC implementMarch the5, methods2025 of(11:05am) valuations authorizedk inm thise article- 3 - e a n e d r e 22l ofu the[ PropertyA Taxd Code."included cin ethe sdetermination kof 23value SECTIONof 2.the land.

AD. new section of the Property Tax Code, e a n b 24 Section 7-36-34 NMSA 1978, is enacted to read:

uThe [department "7-36-34.shall adopt regulations to implement the methods of valuation authorized in this article of the Property Tax Code." SECTION 2.

[NEWA MATERIAL]new SPECIALsection METHODof OFthe VALUATION--Property .230025.3Tax -Code, 3Section -7-36-34 CERTAINNMSA RESIDENTIAL1978, MULTIFAMILYis HOUSING.--enacted A.to read:

Multifamily"7-36-34. housing shall be valued at its current and correct value in accordance with the provisions of the Property Tax Code, except as provided in Subsection B of this section;

provided[NEW that:MATERIAL ] SPECIAL METHOD OF VALUATION-- CERTAIN RESIDENTIAL MULTIFAMILY HOUSING.-- A.

Multifamily housing shall be valued at its current and correct value in accordance with the provisions of the Property Tax Code Sfl1º , except as provided in Subsection B of this section;

provided that»Sfl1 :

STBTCº or»STBTC (2) the per-unitSTBTCºper-unit»STBTC value of a h multifamily housing complex in a tax year shall not exceed an g o t hr amount equal to Sfl1ºthe greater of:»Sfl1 g e i k Sfl1º(a)»Sfl1 the total property value dividedh r i s STBTCºdivided by the number of units in the multifamily housing,h , t, e u g housing,»STBTC multiplied by forty percent;percent Sfl1º;

or e b l e e h (b) for multifamily housing for which a n d d i = = o h final certificate of occupancy was issued by the applicable l ] b ,d i a º e r i = r local government prior to January 1, 2024, the value as of t e w d m a n o January 1, 2024 as reflected on the notice of value from the d m :

b e d s º o t n = .230025.3AIC March 5, 2025 (11:05am) s k m e - 4 - e a n e d r e l u [ A d county for the 2024 tax year and increased in accordance with Section 7-36-21.2 NMSA 1978»Sfl1 ;

Sfl1º B.

Subject to the provisions of Paragraphs (1) and (2) of Subsection A of this section, the current and correct e t 17 value of multifamily housing constructed in the year w l n d 18 immediately prior to a tax year shall be the lower of the:the:»Sfl1 Sfl1ºB.

=For =newly 19constructed multifamily housing for which the applicable local government issues a lfinal certificate of occupancy in the year immediately prior to the applicable tax year, the total property value used in the calculation made pursuant to Subparagraph (a) of Paragraph (2) of Subsection A of this section shall be the lower of:»Sfl1 (1) current and correct value;

or ih ag e r 20 (2) the actual costs of construction of the ao t mhr m 21 multifamily housing and the actual costs of the land on which dg r e 22i k the multifamily housing is located.