A bill for an act relating to the assessment and valuation of property rented or leased to certain low-income individuals and families and including effective date and retroactive applicability provisions.(See HF 717.)
The enactment of HSB61 is projected to have significant effects on how properties used to house low-income families are assessed. By changing the assessment strategy to reflect actual rent levels paid by tenants, the bill intends to create more equitable and reflective property valuations. This could alleviate some of the financial pressures on landlords while ensuring that taxation aligns more closely with actual incomes derived from such properties. Furthermore, the retroactive applicability provision ensures that these changes affect assessment years beginning January 1, 2022, which may impact previous property valuations and tax responsibilities.
House Study Bill 61 (HSB61) addresses the assessment and valuation of properties rented or leased to low-income individuals and families in the state of Iowa. The bill modifies existing provisions in the Iowa Code, specifically regarding how assessors determine the value of such properties. It stipulates that for properties classified under Section 42 of the Internal Revenue Code, assessors must use the productive and earning capacity derived from actual rents received as their metric for appraisal, rather than relying solely on conventional market value assessments. Moreover, it mandates that the limitations on rental payments imposed by Section 42 shall be taken into account when assessing property value.
One notable area of contention regarding HSB61 revolves around its potential implications for revenue generation for local governments. Critics argue that by altering assessment methods for low-income housing, there may be a significant reduction in property tax revenues, which are often crucial for funding local services and infrastructure. Proponents of the bill counter that the reform is necessary for addressing the unique challenges faced by low-income housing providers and ensures that property taxation is fairer. Another point of debate involves the inclusion of retroactive applicability, as this could lead to disputes over previous assessments and create administrative challenges for city assessors.