Low-Income Housing Property Tax Exemption

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The California Revenue and Taxation Code provides that property owned by a nonprofit organization or eligible limited liability company providing housing for lower income households can qualify for the welfare exemption.

At least one of the following criteria is applicable to be eligible:

  • The acquisition, construction, rehabilitation, development, or operation of the property is financed with government financing in the form of tax-exempt mortgage revenue bonds; general obligation bonds; local, state, or federal loans or grants; or any loan insured, held, or guaranteed by the federal government; or project–based federal funding under section 8 of the Housing Act of 1937. (The term “government financing” does not include federal rental assistance through tenant rent-subsidy vouchers under section 8 of the Housing Act of 1937.)
  • The owner is eligible and receives state low-income housing tax credits pursuant to Revenue and Taxation sections 12205, 12206, 17057.5, 17058, 23610.4, and 23610.5 or federal low-income housing tax credits pursuant to section 42 of the Internal Revenue Code.
  • In the case of a claim that is filed for the 2000-2001 fiscal year or any fiscal year thereafter, 90 percent or more of the occupants of the property are lower income households whose rents do not exceed the rent prescribed by section 50053 of the Health and Safety Code. The total exemption amount allowed under this subdivision to a taxpayer, with respect to a single property or multiple properties for any fiscal year on the sole basis of the application of this subparagraph, may not exceed twenty thousand dollars ($20,000) of tax. [section 214(g)(1)(c)]

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