O F F I C E O F L E G I S L A T I V E R E S E A R C H
P U B L I C A C T S U M M A R Y
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PA 22-73—sHB 5168
Planning and Development Committee
AN ACT CONCERNING PROPERTY TAX EXEMPTIONS FOR
PROPERTY USED FOR CHARITABLE PURPOSES
SUMMARY: This act eliminates a restriction on a property tax exemption for
certain charitable organizations, making various types of housing for vulnerable
populations exempt even if the housing is not temporary. It also requires assessors
to (1) record their reasons for denying property tax exemptions for certain nonprofit
organizations and (2) post on their website the form that organizations must file
every four years to claim a property tax exemption (i.e., tax-exempt filings).
The act also makes technical and conforming changes.
EFFECTIVE DATE: October 1, 2022, except for the provision on property tax
denials, which is effective July 1, 2022, and applicable to assessment years starting
on and after October 1, 2022.
TAX-EXEMPT CHARITABLE HOUSING
By law, certain property owned by, or held in trust for, a federally tax-exempt
organization that is organized exclusively for charitable purposes is exempt from
municipal property tax. Under prior law, housing partially or entirely funded by
government subsidies or for low- and moderate-income people was generally not
deemed a charitable purpose and was ineligible for this property tax exemption. But
the law provided an exception for temporary housing, making it eligible for the
exemption, if it was used mainly for one or more of the following purposes:
1. an orphanage;
2. a drug or alcohol treatment or rehabilitation facility;
3. to house people who are homeless, have a mental health disorder or an
intellectual or physical disability, or are domestic violence victims;
4. to house ex-offenders or participants in judicial branch- or Department of
Corrections-sponsored programs; or
5. as short-term housing where the average stay is less than six months.
The act eliminates the provision restricting the exemption to temporary housing
for these purposes. This expands the exemption to the first four types of housing
listed above regardless of how long people stay in them.
The act also specifies that government payments to treat, support, or care for
people living in these properties are not subsidies.
EXEMPTION DENIALS
Existing law requires boards of assessors (“assessors”) to determine what
portion of a property, if any, owned by scientific, educational, literary, historical, O L R P U B L I C A C T S U M M A R Y
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charitable, agricultural, and cemetery organizations (i.e., charitable property) is
exempt and assess any property they determine is taxable. They must do so by
inspecting the tax-exempt filing these organizations must submit to claim a property
tax exemption. If an assessor determines that property claimed to be exempt is
taxable, the act requires the assessor to state the rationale for the determination in
its records.