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Assessor's Manual, Volume 4, ExemptionAdministration

Exemption Administration Manual - Part 2
Multiple Dwellings

Section 4.07 - PHFL Section 36-a(2)

Municipally Owned Housing Projects Acquired from
Housing Development Fund Company or Limited-
Profit Housing Company
PHFL Section 36-a(2)

Exemption Code(s): 18100 Year Originally Enacted: 1968

Related Statutes:PHFL Article 11 SUMMARY: Property acquired by a municipality from a housing development fund company or a limited-profit (Mitchell-Lama) housing company and used for low-income, moderate- income, or middle-income housing is wholly exempt from taxation but liable for special ad valorem levies and special assessments. The exemption continues until the project is sold, leased for not more than 99 years, or otherwise disposed of.

Payments in lieu of taxes, although not required by law, may be made to a taxing jurisdiction in which the project is located or to a jurisdiction that provides services to the project. If such payments are made, they may not for any one year exceed (1) the taxes last levied on the property prior to its acquisition for the project or (2) an amount approved by the State Commissioner of Housing, whichever is less.

  1. ELIGIBILITY REQUIREMENTS:
    1. Ownership Requirements: Property must be owned by a municipality and must have been acquired from a housing development fund company or a limited-profit (Mitchell-Lama) housing company (see the Exemption Profiles for PHFL §33(1)(a) and §577(1) for the organizational requirements for these companies). The sale, lease, or other disposition of the property to an entity not entitled to a 100% exemption of property held in its own name subjects such property to immediate liability for total or partial taxation for the unexpired portion of the taxable year.
    2. Property Location Requirements: None.
    3. Property Use Requirements: Property must be used for housing for low-income, moderate-income, or middle-income persons. For a description of the income limits on low-income tenants, see Chart ID, PHFL Article 2, §31, and Article 11, § §576, 577-a. The statute sets no limits on the income of moderate-income or middle income tenants.
    4. Certification by State or Local Government: None required.
    5. Required Construction Start Date or Other Time Requirement: None.
  2. LOCAL OPTION: Not for the initial exemption. However, an existing exemption may be extended for an additional period following the expiration of the initial tax exemption period (see Limitations on Exemption below).
  3. LIMITATION ON EXEMPTION:
    General
    Municipal
    Taxes
    School
    District
    Taxes
    Special
    Ad Valorem
    Tax
    Special
    Assessments
    1. Amount No
    limit
    No
    limit
    No
    exemption
    allowed
    No
    exemption
    allowed
    2. Duration Yes* Yes* No
    exemption
    allowed
    No
    exemption
    allowed
    3. Taxing Jurisdiction
    a. County or County
    Special Districts
    Ex NA Tax Tax
    b. City
    Ex NA NA Tax
    c. Town or Town
    Special District
    Ex NA Tax Tax
    d. Village
    Ex NA NA Tax
    e. School District
    NA Ex NA NA
    Ex-Exemptâ â â â â â Tax-Taxableâ â â â â â NA-Not Applicable

    * Duration of exemption is limited to the period that begins when the municipality acquires the property and continues until the property is sold, leased for not more than 99 years, or otherwise disposed of.

    After the tax exemption period has expired, any project that received this exemption may be granted an additional tax exemption period of up to 50 years, or until such time as the project no longer complies with the operating requirements of the Mitchell-Lama Program, whichever is sooner.

  4. PAYMENTS IN LIEU OF TAXES: Although not required by law, payments in lieu of taxes are allowed to be made to a taxing jurisdiction in which the property is located or to a jurisdiction that provides services to the property. The amount of such payments for any one year may not exceed (1) the taxes last levied on the property prior to its acquisition for the project or (2) an amount approved by the State Commissioner of Housing, whichever is less.

    Since they are not collected by the tax collector, payments in lieu of taxes should not be entered on the tax roll. Such payments are collected in the same manner as are other payments due a municipality under contract.

  5. CALCULATION OF EXEMPTION:
    1. General Municipal and School District Taxes: 100% of assessed value. Sale, lease, or other disposition of the property to a person or organization not entitled to a 100% exemption of property held in its own name immediately subjects the property to total or partial taxation for the unexpired portion of the taxable year.
    2. Special Ad Valorem Levies and Special Assessments: No exemption allowed.
  6. CODING OF EXEMPTION ON ASSESSMENT ROLL:
    Code Description of Alternative Codes Possible
    18100

    Assessment Roll Section(s): Exempt (RPS Section 8).

    NOTE: This code should not be used to identify property that is exempt under any of the statutes listed under Similar Exemptions below.

  7. FILING REQUIREMENTS (Owner or Occupant of Property): None.
  8. REPORTING REQUIREMENTS (Assessor): None.
  9. SIMILAR EXEMPTIONS: See Chart IA and Chart IB.

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