A Bill for an Act
Page 1, Line 101Concerning the expansion of property tax exemptions to
Page 1, Line 102include development of low-income rental property.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
Current law provides an exemption for taxation on property acquired and developed for low-income housing by nonprofit housing providers, community land trusts, and nonprofit affordable homeownership developers. The bill expands the exemption to also include property intended for low-income residential rental property.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, 39-3-113.5, amend
Page 2, Line 3(1)(a.5), (1)(b), (1)(b.5), (1)(c)(II) introductory portion, (1)(d), (2)(a),
Page 2, Line 4(2)(c)(II)(B), and (2)(c)(II)(C) as follows:
Page 2, Line 539-3-113.5. Property acquired by nonprofit housing provider
Page 2, Line 6for low-income housing - use for charitable purposes - exemption -
Page 2, Line 7limitations - definitions.
Page 2, Line 8(1) As used in this section, unless the context otherwise requires:
Page 2, Line 9(a.5) "Community land trust" means a nonprofit organization that
Page 2, Line 10is exempt from taxation under section 501 (c)(3) of the federal "Internal
Page 2, Line 11Revenue Code of 1986", as amended, and is designed to ensure long-term
Page 2, Line 12housing affordability through a shared-equity model by acquiring and
Page 2, Line 13maintaining ownership of real property, while selling or renting the
Page 2, Line 14improvements to low-to-middle income households for use as a primary
Page 2, Line 15residence.
Page 2, Line 16(b) "Indicators of intent" means off-site activities of a nonprofit
Page 2, Line 17housing provider that establish the provider's specific intent to:
Page 2, Line 18(I) Use property for the purpose of constructing or rehabilitating
Page 2, Line 19housing to be sold or rented to low-income applicants; or
Page 2, Line 20(II) Sell or rent the property to low-income applicants for the
Page 2, Line 21purpose of constructing or rehabilitating housing for the low-income
Page 2, Line 22applicants.
Page 2, Line 23(b.5) "Land lease" means a long-term lease used in affordable
Page 2, Line 24homeownership or rental properties to lease the real property that is
Page 2, Line 25owned by a community land trust or nonprofit affordable homeownership
Page 2, Line 26or rental developer to the owner of the improvements on the real
Page 3, Line 1property and preserve the improvements as an affordable homeownership
Page 3, Line 2or rental property.
Page 3, Line 3(c) "Low-income applicant" means:
Page 3, Line 4(II) For property tax years commencing on or after January 1,
Page 3, Line 52024, an individual or family who both apply to a nonprofit housing
Page 3, Line 6provider to purchase or rent an affordable
for-salePage 3, Line 7income is at or below either:
Page 3, Line 8(d) "Nonprofit housing provider" means an organization that is
Page 3, Line 9exempt from federal income tax pursuant to section 501 (c)(3) of the
Page 3, Line 10federal "Internal Revenue Code of 1986", as amended, and that has a
Page 3, Line 11primary organizational mission
ofPage 3, Line 12(I) Working with low-income applicants to construct or
Page 3, Line 13rehabilitate housing that the organization then sells or rents to the
Page 3, Line 14low-income applicants for their residential use; or
Page 3, Line 15(II) Selling or renting property or improvements to low-income
Page 3, Line 16applicants for the low-income applicants' residential use.
Page 3, Line 17(2) (a) Subject to the limitations specified in subsection (3) of this
Page 3, Line 18section, for property tax years commencing on or after January 1, 2011,
Page 3, Line 19real property acquired by a nonprofit housing provider upon which the
Page 3, Line 20provider intends to construct or rehabilitate housing to be sold or rented
Page 3, Line 21to low-income applicants or which the provider intends to sell or rent
Page 3, Line 22to low-income applicants for their residential use is deemed to be being
Page 3, Line 23used for strictly charitable purposes, regardless of whether or not there is
Page 3, Line 24actual physical use of the property, and shall be exempt from property
Page 3, Line 25taxation in accordance with section 5 of article X of the state constitution.
Page 3, Line 26(c) (II) For property tax years commencing on or after January 1,
Page 3, Line 272024, in determining whether a nonprofit housing provider satisfies the
Page 4, Line 1intent requirement of subsection (2)(a) of this section with respect to
Page 4, Line 2particular property, the administrator may consider indicators of intent,
Page 4, Line 3including but not limited to:
Page 4, Line 4(B) A resolution by the nonprofit housing provider's board that
Page 4, Line 5designates the property for construction or rehabilitation of for-sale or
Page 4, Line 6rental affordable housing; or
Page 4, Line 7(C) A resolution by the nonprofit housing provider's board that
Page 4, Line 8approves the purchase of the property for land banking with the purpose
Page 4, Line 9of constructing or rehabilitating for-sale or rental affordable housing.
Page 4, Line 10SECTION 2. In Colorado Revised Statutes, 39-3-127.7, amend
Page 4, Line 11(1), (2)(a), (2)(c), (2)(d), (2)(e), (3)(a)(I), (3)(a)(III), (3)(b), (4), (6), (7)(a)
Page 4, Line 12introductory portion, and (7)(b) as follows:
Page 4, Line 1339-3-127.7. Community land trust property - nonprofit
Page 4, Line 14affordable homeownership or rental developer property - exemption
Page 4, Line 15- requirements - legislative declaration - definitions.
Page 4, Line 16(1) (a) The general assembly hereby finds and declares that:
Page 4, Line 17(I) The cost of homeownership and home rental has risen
Page 4, Line 18dramatically in Colorado: From December 2020 to December 2022, the
Page 4, Line 19median home value in Colorado increased over thirty percent; and
Page 4, Line 20(II) Entry-level homeownership options and affordable
Page 4, Line 21rentals are increasingly unavailable, and community land trusts and
Page 4, Line 22nonprofit affordable
homeownershipPage 4, Line 23increasingly large role in helping low- and middle-income Coloradans
Page 4, Line 24access homeownership and affordable homes for rent
; andPage 4, Line 25
(III) Compared to tools used to incentivize affordable rentalPage 4, Line 26
housing, such as the low-income housing tax credit, there are fewer toolsPage 4, Line 27
to incentivize the creation of affordable for-sale housing.Page 5, Line 1(b) Therefore, it is the intent of the general assembly to provide
Page 5, Line 2a limited property tax exemption to community land trusts and nonprofit
Page 5, Line 3affordable
homeownershipPage 5, Line 4(2) As used in this section, unless the context otherwise requires:
Page 5, Line 5(a) "Affordable homeownership or rental property" means any
Page 5, Line 6dwelling that:
Page 5, Line 7(I) Is restricted by a deed that impacts ownership of the property,
Page 5, Line 8limits the property's resale price, requires a long-term land lease with a
Page 5, Line 9community land trust or nonprofit affordable homeownership or rental
Page 5, Line 10developer, or imposes any other restriction that limits the property such
Page 5, Line 11that it may only be purchased or rented by designated households, a
Page 5, Line 12community land trust, or a nonprofit affordable homeownership or
Page 5, Line 13rental developer;
Page 5, Line 14(II) Is sold or rented to a household that at the time of purchase
Page 5, Line 15or rental is at or below one hundred percent of the area median income
Page 5, Line 16of households of that same size in the county in which the housing is
Page 5, Line 17located; and
Page 5, Line 18(III) Is sold or rented to a purchaser or lessee to be used as a
Page 5, Line 19primary residence.
Page 5, Line 20(c) "Improvement" means a permanent change to real property
Page 5, Line 21that augments the real property's value including but not limited to a
Page 5, Line 22single-family home, townhome,
orPage 5, Line 23(d) "Land lease" means a long-term lease used in affordable
Page 5, Line 24homeownership or rental properties to lease the real property that is
Page 5, Line 25owned by a community land trust or nonprofit affordable homeownership
Page 5, Line 26developer to the owner of the improvements on the real property and
Page 5, Line 27preserve the improvements as an affordable homeownership or rental
Page 6, Line 1property.
Page 6, Line 2(e) "Nonprofit affordable homeownership or rental developer"
Page 6, Line 3means an organization that is exempt from federal income tax pursuant
Page 6, Line 4to section 501 (c)(3) of the federal "Internal Revenue Code of 1986", as
Page 6, Line 5amended, and that has a primary organizational mission
ofPage 6, Line 6includes providing for-sale or for rent affordable housing units to
Page 6, Line 7low-to-middle income households for use as a primary residence.
Page 6, Line 8(3) (a) For property tax years commencing on or after January 1,
Page 6, Line 92024, real property is deemed to be used for a strictly charitable purpose,
Page 6, Line 10and is exempt from property taxation in accordance with section 5 of
Page 6, Line 11article X of the state constitution, if the real property:
Page 6, Line 12(I) Is held by either a community land trust or a nonprofit
Page 6, Line 13affordable homeownership or rental developer;
Page 6, Line 14(III) Is leased to the owner of the improvements as an affordable
Page 6, Line 15homeownership or rental property.
Page 6, Line 16(b) The real property described in subsection (3)(a) of this section
Page 6, Line 17is deemed to be used for a strictly charitable purpose, and is exempt from
Page 6, Line 18property taxation in accordance with section 5 of article X of the state
Page 6, Line 19constitution, until the real property is no longer used as an affordable
Page 6, Line 20homeownership or rental property.
Page 6, Line 21(4) If a community land trust or nonprofit affordable
Page 6, Line 22homeownership or rental developer claims a property tax exemption
Page 6, Line 23pursuant to this section for a real property and then subsequently sells,
Page 6, Line 24donates, or leases that real property so that the real property no longer
Page 6, Line 25qualifies as an affordable homeownership or rental property, the
Page 6, Line 26community land trust or nonprofit affordable homeownership or rental
Page 6, Line 27developer is liable for all property taxes for the real property for the
Page 7, Line 1property tax years when the real property did not qualify as an affordable
Page 7, Line 2homeownership or rental property and during which the community
Page 7, Line 3land trust or nonprofit affordable homeownership or rental developer
Page 7, Line 4did not pay property taxes for the real property due to the property tax
Page 7, Line 5exemption described in this section.
Page 7, Line 6(6) A community land trust or nonprofit affordable home
Page 7, Line 7ownership or rental developer that owns real property that qualifies for
Page 7, Line 8the property tax exemption described in this section shall submit the land
Page 7, Line 9lease for each real property that qualifies for the property tax exemption
Page 7, Line 10described in this section to the appropriate county assessor within
Page 7, Line 11twenty-five days of the initial execution of the land lease.
Page 7, Line 12(7) (a) Any community land trust or nonprofit affordable
Page 7, Line 13homeownership or rental developer that claims a property tax
Page 7, Line 14exemption pursuant to this section shall comply with the provisions of
Page 7, Line 15section 39-2-117; except that, if the real property that is allowed an
Page 7, Line 16exemption pursuant to this section has been subdivided, the owner of such
Page 7, Line 17property or the owner's agent is only required to:
Page 7, Line 18(b) Notwithstanding subsection (7)(a)(II) of this section, if the real
Page 7, Line 19property that is allowed an exemption pursuant to this section has been
Page 7, Line 20subdivided but the subdivided parcel has been split into a separate taxable
Page 7, Line 21parcel from the improvements and is leased to the owner of the
Page 7, Line 22improvements as an affordable homeownership or rental property, then
Page 7, Line 23the owner of such real property or the owner's agent must file an
Page 7, Line 24individual annual report for the subdivided parcel in accordance with
Page 7, Line 25section 39-2-117 (3)(a).
Page 7, Line 26SECTION 3. Act subject to petition - effective date. This act
Page 7, Line 27takes effect January 1, 2027; except that, if a referendum petition is filed
Page 8, Line 1pursuant to section 1 (3) of article V of the state constitution against this
Page 8, Line 2act or an item, section, or part of this act within the ninety-day period
Page 8, Line 3after final adjournment of the general assembly, then the act, item,
Page 8, Line 4section, or part will not take effect unless approved by the people at the
Page 8, Line 5general election to be held in November 2026 and, in such case, will take
Page 8, Line 6effect January 1, 2027, or on the date of the official declaration of the
Page 8, Line 7vote thereon by the governor, whichever is later.