Senate Bill 539 aims to amend the Tennessee Code regarding the assessment of multi-unit rental housing that is subject to government restrictions on use. The bill introduces a new section that outlines specific methods for assessing such properties, including the application of an annual net operating income approach, adherence to the Uniform Standards of Professional Appraisal Practice, and adjustments based on the average annual rent of restricted units compared to unrestricted units. Additionally, the bill mandates the exclusion of low-income housing tax credits from the valuation process and establishes guidelines for determining the capitalization rate, which must be higher than that for unrestricted properties and published annually by the division of property assessments.

The bill also places responsibilities on property owners, requiring them to notify property assessors of any changes in the status of government restrictions and to file necessary information for proper assessment. Failure to comply with these notification requirements may result in liability for delinquent property taxes. The act is set to take effect upon becoming law for the purposes of publishing capitalization rates and application forms, while the broader provisions will take effect on January 1, 2026, applying to properties developed after that date.