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 15 years and gradually increasing to 12% by the thirtieth year. The schedule is as follows: 8% for years 1-15, 10% for years 16-20, and 12% for years 21-30.

The bill clarifies that the term "residential property" excludes any non-residential portions of mixed-use buildings, requiring property owners to provide evidence for the fractional portion of each property that should be taxed at the appropriate non-residential rate. The local assessor will tax the residential portion at the rates specified in subsections (a) or (b) 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 previously established tax rate may continue unless rejected by the property owner. This prior tax treatment is transferable to subsequent property owners if the conditions 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 qualifying properties at any rate higher than provided for in this section. This act will take effect upon passage.

Statutes affected:
5688: 44-5-13.11