Property Tax – Low–Income Housing Tax Credit – Valuation of Property

New property tax rules for affordable housing

Maryland changes property tax valuation rules for commercial housing developed with federal low-income housing tax credits. The law takes effect June 1, 2025, and applies to taxable years beginning after June 30, 2025. Assessors must consider rent limits, affordability rules, and related restrictions under federal, state, and local programs. They cannot count the federal housing tax credits as property income. They can consider replacement cost only when it produces a lower value than the income method and reflects the property's value. The law removes the required formula using actual or expected net operating income and local market rates for conventional multifamily housing. That formula included a 1.5%–2% upward rate adjustment for affordability restrictions and other federal tax-credit limits. Maryland's housing department must notify the state tax assessment department of a credit award within 30 days after closing and execution and delivery of the governing regulatory agreement. Income-based and other appropriate valuation methods remain available for income-producing property, excluding land actively used for farming. Those methods also remain available for income-producing single-family homes that are not owner-occupied. The law does not guarantee lower property taxes or rents.