Sacramento, CA….The California State Board of Equalization (BOE) unanimously acted to help preserve some low-income housing projects across California. The approved legal annotation clarifies that low-income housing properties subject to “payment in lieu of taxes” (PILOT) agreements may still be able to qualify for a property tax exemption. PILOT agreements are made between developers of low-income housing and local governments.
“The affordable housing communities have received some clarity today,” Chairman Horton stated. “The Board concluded that the developers can enter into a PILOT agreement and pay those fees if the fee serves to further the intended purpose of the affordable housing program. If this fee is found to be a tax and not benefiting the Affordable Housing community and residents, the welfare exemption can be revoked.”
The property tax exemption, known as the welfare exemption, is co-administered by the BOE and county assessors. First, the BOE determines if the organization is eligible under one of the four qualifying purposes (religious, scientific, hospital, or charitable). Then, a county assessor decides if that organization’s property qualifies for the exemption based on the property’s specific use.
* * * * *
Elected in 2010, Chairman Jerome E. Horton is the Fourth District Member of the California State Board of Equalization, representing more than 8.5 million residents in Los Angeles County. He is also the Board of Equalization’s Legislative Committee Chairman. He is the first to serve on the Board of Equalization with over 21 years of experience at the BOE. Horton previously served as an Assembly Member of the California State Assembly from 2000-2006.
The five-member California State Board of Equalization is a publicly elected tax board. The Board of Equalization collects more than $53.7 billion annually in taxes and fees supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes. For more information on other taxes and fees in California, visit www.taxes.ca.gov.