The bill amends Section 44-5-13.11 of the General Laws regarding the assessment and taxation of qualifying low-income housing. It establishes that any residential property issued an occupancy permit on or after January 1, 1995, and encumbered by a covenant for low-income housing, will be taxed at a rate of 8% of the previous year's gross scheduled rental income if at least 40% of the rental dwelling units are affordable to households at or below 80% of the statewide area median income, or if at least 30% of the units are affordable to households at or below 60% of the same income level.

Additionally, the bill introduces a tax stabilization schedule for residential rental housing created by converting existing buildings from non-residential use, starting at 8% for the first ten years and gradually increasing to 12% by the thirtieth year, as outlined in a specified schedule.

The bill clarifies that the term "residential property" does not include any portion of a mixed-use building that is not used as a residence. Property owners must provide evidence to local assessors to demonstrate the fractional portion of each property that should be taxed at the appropriate non-residential rate. The assessor will tax the residential portion at the rates set in subsections (a) or (b) of this section, and the remainder at the appropriate non-residential rate.

For properties approved for tax treatment under this section by an assessor as of December 31, 2024, the manner in which the assessor has applied this statute in the past may continue, allowing them to receive any previously established tax rate agreed to by the municipality and the property owner unless the property owner affirmatively rejects it. This prior tax treatment is transferable to any subsequent property owner if the conditions of the tax treatment are met to the satisfaction of the assessor.

Furthermore, the bill states that creating low-income housing and new housing through adaptive reuse are matters of state-wide concern, and no city or town shall have the authority to tax properties qualifying for and utilizing this section at any rate higher than provided for in the bill. The act is set to take effect upon passage.

Statutes affected:
5688: 44-5-13.11