TN SB0539

Multi-unit rental housing (4+ units) subject to government restrictions must be assessed using actual income, stabilized operating expenses, and capitalization rates consistent with Uniform Standards of Professional Appraisal Practice

Low-income housing tax credits under IRC Section 42 and other state/federal program credits must be excluded when determining property value for tax assessment purposes

Capitalization rates must be 50-150 basis points above national average multifamily rates published by realtyrates.com, with the Division of Property Assessments publishing applicable rates annually starting tax year 2026

Property owners must notify assessors by December 31 if their property becomes or ceases to be subject to government use restrictions, or faces foreclosure; failure to notify results in liability for delinquent taxes, interest, and penalties

Applies to properties developed on or after January 1, 2026; "low-income" defined as households earning at or below 80% of area median income as determined by HUD