SB 734 – Tenants In Residential Units In Low Income Publicly Owned Housing Projects Are Not Subject To Property Tax

CATEGORY: Nonprofit News
CLIENT TYPE: Nonprofit
DATE: Nov 06, 2023

When a state or local public entity enters into a written contract with a private party to lease property that is exempt from taxation, it may include a statement in the contract that the possessory interest created may be subject to property taxation.  The tenant (or party in whom the possessory interest is vested) may be subject to the payment of property taxes levied on the interest.

Senate Bill 734 (SB 734) excludes a tenancy in a residential unit of a publicly owned housing project by a low-income household leased at affordable rents from the definition of “possessory interest.”  Therefore, this type of tenancy does not create independent possession that would be subject to taxation.

SB 734 took effect immediately on October 11, 2023 as a tax levy.

(SB 734 adds Section 107.10 to the Revenue and Taxation Code.)

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