HB458 Summary

• Requires appraisals of Class II affordable rental housing to use income-based capitalization approach reflecting net operating income, adjusted for the adverse effect of property rental restrictions.

• Mandates annual capitalization rates be determined by Department of Revenue based on prevailing cost of equity capital for commercial real estate, effective for tax year beginning October 1, 2014.

• Prohibits consideration of federal or state income tax credits in property valuations and appraisals, except when directly utilized by the property owner to offset personal income taxes owed.

• Requires property owners to provide annual statements of actual gross and net operating income prepared under generally accepted accounting principles to county tax assessors by October 1 each year.

• Applies to all assessments of affordable rental housing properties as of October 1, 2014 and thereafter, with Department of Revenue required to adopt implementing rules consistent with Alabama Administrative Procedure Act.