SENATE BILL 186

57th legislature - STATE OF NEW MEXICO - first session, 2025

INTRODUCED BY

Peter Wirth and George K. Muñoz

 

 

 

 

 

AN ACT

RELATING TO PROPERTY TAX; CREATING A SPECIAL METHOD OF VALUATION FOR CERTAIN MULTIFAMILY HOUSING.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 7-36-15 NMSA 1978 (being Laws 1975, Chapter 165, Section 2, as amended) is amended to read:

     "7-36-15. METHODS OF VALUATION FOR PROPERTY TAXATION PURPOSES--GENERAL PROVISIONS.--

          A. Property subject to valuation for property taxation purposes under this article of the Property Tax Code shall be valued by the methods required by this article of the Property Tax Code whether the determination of value is made by the department or the county assessor. The same or similar methods of valuation shall be used for valuation of the same or similar kinds of property for property taxation purposes.

          B. Unless a method or methods of valuation are authorized in Sections 7-36-20 through [7-36-33] 7-36-34 NMSA 1978, the value of property for property taxation purposes shall be its market value as determined by application of the sales of comparable property, income or cost methods of valuation or any combination of these methods. In using any of the methods of valuation authorized by this subsection, the valuation authority:

                (1) shall apply generally accepted appraisal techniques; and

                (2) in determining the market value of residential housing, shall consider any decrease in the value that would be realized by the owner in a sale of the property because of the effects of any affordable housing subsidy, covenant or encumbrance imposed pursuant to a federal, state or local affordable housing program that restricts the future use of the property or the resale price of the property or would otherwise prohibit the owner from fully [benefitting] benefiting from any enhanced value of the property. As used in this paragraph:

                     (a) "subsidy, covenant or encumbrance imposed pursuant to a federal, state or local affordable housing program" includes those imposed by a nonprofit entity approved by a governmental entity as a qualifying grantee pursuant to the Affordable Housing Act; and

                     (b) "residential housing" means any building, structure or portion thereof that is primarily occupied, or designed or intended primarily for occupancy, as a residence by one or more households and any real property that is offered for sale or lease for the construction or location thereon of such a building, structure or portion thereof. "Residential housing" includes congregate housing, manufactured homes, housing intended to provide or providing transitional or temporary housing for homeless persons and common health care, kitchen, dining, recreational and other facilities primarily for use by residents of a residential housing project.

          C. Dams, reservoirs, tanks, canals, irrigation wells, installed irrigation pumps, stock-watering wells and pumps, similar structures and equipment used for irrigation or stock-watering purposes, water rights and private roads shall not be valued separately from the land they serve. The foregoing improvements and rights shall be considered as appurtenances to the land they serve, and their value shall be included in the determination of value of the land.

          D. The department shall adopt regulations to implement the methods of valuation authorized in this article of the Property Tax Code."

     SECTION 2. A new section of the Property Tax Code, Section 7-36-34 NMSA 1978, is enacted to read:

     "7-36-34. [NEW MATERIAL] SPECIAL METHOD OF VALUATION--CERTAIN RESIDENTIAL MULTIFAMILY HOUSING.--

          A. Multifamily housing shall be valued at its current and correct value in accordance with the provisions of the Property Tax Code, except as provided in Subsection B of this section; provided that:

                (1) any increase in value over the prior year shall be limited as provided in Section 7-36-21.2 1978;

                (2) the per-unit value of a multifamily housing complex in a tax year shall not exceed an amount equal to the total property value divided by the number of units in the multifamily housing, multiplied by forty percent; and

                (3) no value shall be attributed to amenities or ancillary improvements to the property other than multifamily housing units.

          B. Subject to the provisions of Paragraphs (1) and (2) of Subsection A of this section, the current and correct value of multifamily housing constructed in the year immediately prior to a tax year shall be the lower of the:

                (1) current and correct value; or

                (2) the actual costs of construction of the multifamily housing and the actual costs of the land on which the multifamily housing is located. The property owner of the multifamily housing shall submit evidence of actual costs to the county assessor of the county in which the multifamily housing is located in a form and manner as required by the county assessor.

          C. As used in this section, "multifamily housing" means residential property with five or more units that are regularly rented or leased, or available to rent or lease, to tenants pursuant to a written lease for a term of thirty days or longer."

     SECTION 3. APPLICABILITY.--The provisions of this act apply to the 2026 and subsequent property tax years.

- 5 -