WES MOORE, Governor Ch. 67
– 1 –
Chapter 67
(House Bill 585)
AN ACT concerning
Property Tax – Low–Income Housing Tax Credit – Valuation of Property
FOR the purpose of requiring the supervisor of assessments for a county to evaluate a
certain net operating income calculation when determining the value of commercial
real property that is developed under a certain provision of federal law Department
of Housing and Community Development to notify the State Depart ment of
Assessments and Taxation that a commercial property that is developed under a
certain provision of federal law has been awarded a low–income housing tax credit;
and generally relating to low–income housing.
BY repealing and reenacting, with amendments,
Article – Tax – Property
Section 8–105(a)
Annotated Code of Maryland
(2019 Replacement Volume and 2024 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Tax – Property
8–105.
(a) (1) Except for land that is actively devoted to farm or agricultural use, the
supervisor:
(i) may value income producing real property by using the
capitalization of income method or any other appropriate method of valuing the real
property; and
(ii) shall consider an income method in valuing income producing
commercial real property.
(2) For income producing single–family residential real property, the
supervisor may value the property by using the same methods that are us ed for
single–family residential real property that is owner–occupied.
(3) (I) In determining the value of commercial real property developed
under § 42 of the Internal Revenue Code, the supervisor SHALL EVALUATE EACH OF THE
FOLLOWING : Ch. 67 2025 LAWS OF MARYLAND
– 2 –
[(i)] 1. [shall consider] the impact of applicable rent restrictions,
affordability requirements, or any other related restrictions required by § 42 of the Internal
Revenue Code and any other federal, State, or local programs;
[(ii)] 2. [may not consider income tax credits under § 42 of the
Internal Revenue Code as income attributable to the real property; and
(iii) 3. may consider] the replacement cost approach only if the
value produced by the replacement cost approach is less than the value produced by the
income approach for the property and it is reflective of the value of the real property; AND
3. THE ACTUAL OR ANTICI PATED NET OPERATING
INCOME ATTRIBUTABLE TO THE REAL PROPERTY , CAPITALIZED AT THE P REVAILING
MARKET RATE FOR CONV ENTIONAL MULTIFAMILY PROPERTIES IN THE SA ME
GEOGRAPHIC AREA , UPWARD ADJUSTED BETW EEN 1.5% AND 2% TO ACCOUNT FOR
AFFORDABILITY RESTRI CTIONS AND OTHER ENCUMBRANCES REQUIRE D UNDER §
42 OF THE INTERNAL REVENUE CODE.
(II) IN DETERMINING THE VA LUE OF COMMERCIAL RE AL
PROPERTY DEVELOPED U NDER § 42 OF THE INTERNAL REVENUE CODE, THE
SUPERVISOR MAY NOT C ONSIDER INCOME TAX C REDITS UNDER § 42 OF THE
INTERNAL REVENUE CODE AS INCOME ATTRIB UTABLE TO THE REAL P ROPERTY.
(II) WITHIN 30 DAYS OF CLOSING AND THE EXECUTION AND
DELIVERY OF THE REGU LATORY AGREEMENT GOV ERNING A LOW–INCOME HOUSING
TAX CREDIT FOR COMME RCIAL REAL PROPERTY DEVELOPED UNDER § 42 OF THE
INTERNAL REVENUE CODE, THE DEPARTMENT OF HOUSING AND COMMUNITY
DEVELOPMENT SHALL NOT IFY THE DEPARTMENT THAT A PRO PERTY HAS BEEN
AWARDED THE LOW –INCOME HOUSING TAX C REDIT.
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect June
1, 2025, and shall be applicable to all taxable years beginning after June 30, 2025.
Approved by the Governor, April 8, 2025.