2023 Colorado Revised Statutes › Title 39 - TAXATION (§§ 39-1-101 — 39-37-301) › PROPERTY TAX (§§ 39-1-101 — 39-14-103) › EXEMPTIONS (§§ 39-3-101 — 39-3-210) › Article 3 - Exemptions (§§ 39-3-101 — 39-3-210) › Part 1 - PROPERTY EXEMPT FROM TAXATION (§§ 39-3-101 — 39-3-138) › Section 39-3-127.7 - [Effective 8/7/2024] Community land trust property - nonprofit affordable homeownership developer property - exemption - requirements - legislative declaration - definitions

(1)
(a)
The general assembly hereby finds and declares that:
(I)
The cost of homeownership has risen dramatically in Colorado: From December 2020 to December 2022, the median home value in Colorado increased over thirty percent;
(II)
Entry-level homeownership options are increasingly unavailable, and community land trusts and nonprofit affordable homeownership developers are playing an increasingly large role in helping low- and middle-income Coloradans access homeownership; and
(III)
Compared to tools used to incentivize affordable rental housing, such as the low-income housing tax credit, there are fewer tools to incentivize the creation of affordable for-sale housing.
(b)
Therefore, it is the intent of the general assembly to provide a limited property tax exemption to community land trusts and nonprofit affordable homeownership developers in certain circumstances.
(2)
As used in this section, unless the context otherwise requires:
(a)
"Affordable homeownership property" means any dwelling that:
(I)
Is restricted by a deed that impacts ownership of the property, limits the property's resale price, requires a long-term land lease with a community land trust or nonprofit affordable homeownership developer, or imposes any other restriction that limits the property such that it may only be purchased by designated households, a community land trust, or a nonprofit affordable homeownership developer;
(II)
Is sold to a household that at the time of purchase is at or below one hundred percent of the area median income of households of that same size in the county in which the housing is located; and
(III)
Is sold to a purchaser to be used as a primary residence.
(b)
"Community land trust" means a nonprofit organization that is exempt from taxation under section 501 (c)(3) of the federal "Internal Revenue Code of 1986", as amended, and is designed to ensure long-term housing affordability through a shared-equity model by acquiring and maintaining ownership of real property, while selling the improvements to low-to-middle income households for use as a primary residence.
(c)
"Improvement" means a permanent change to real property that augments the real property's value including but not limited to a single-family home, townhome, or condominium.
(d)
"Land lease" means a long-term lease used in affordable homeownership properties to lease the real property that is owned by a community land trust or nonprofit affordable homeownership developer to the owner of the improvements on the real property and preserve the improvements as an affordable homeownership property.
(e)
"Nonprofit affordable homeownership developer" means an organization that is exempt from federal income tax pursuant to section 501 (c)(3) of the federal "Internal Revenue Code of 1986", as amended, and that has a primary organizational mission of providing for-sale affordable housing units to low-to-middle income households for use as a primary residence.
(3)
(a)
For property tax years commencing on or after January 1, 2024, real property is deemed to be used for a strictly charitable purpose, and is exempt from property taxation in accordance with section 5 of article X of the state constitution, if the real property:
(I)
Is held by either a community land trust or a nonprofit affordable homeownership developer;
(II)
Has been split into a separate taxable parcel from the improvements; and
(III)
Is leased to the owner of the improvements as an affordable homeownership property.
(b)
The real property described in subsection (3)(a) of this section is deemed to be used for a strictly charitable purpose, and is exempt from property taxation in accordance with section 5 of article X of the state constitution, until the real property is no longer used as an affordable homeownership property.
(4)
If a community land trust or nonprofit affordable homeownership developer claims a property tax exemption pursuant to this section for a real property and then subsequently sells, donates, or leases that real property so that the real property no longer qualifies as an affordable homeownership property, the community land trust or nonprofit affordable homeownership developer is liable for all property taxes for the real property for the property tax years when the real property did not qualify as an affordable homeownership property and during which the community land trust or nonprofit affordable homeownership developer did not pay property taxes for the real property due to the property tax exemption described in this section.
(5)
Improvements on real property that qualifies for the property tax exemption described in this section are not exempt from property taxation.
(6)
A community land trust or nonprofit affordable home ownership developer that owns real property that qualifies for the property tax exemption described in this section shall submit the land lease for each real property that qualifies for the property tax exemption described in this section to the appropriate county assessor within twenty-five days of the initial execution of the land lease.
(7)
(a)
Any community land trust or nonprofit affordable homeownership developer that claims a property tax exemption pursuant to this section shall comply with the provisions of section
39-2-117
; except that if the real property that is allowed an exemption pursuant to this section has been subdivided, the owner of such property or the owner's agent is only required to:
(I)
Submit one application for the exemption for all parcels in connection with the subdivision pursuant to section 39-2-117 (1)(a), but the filing must be accompanied by a payment in accordance with section 39-2-117 (1)(a)(I) in an amount not to exceed the aggregate amount of payments that would be required if individual applications were filed for each parcel; and
(II)
If the exemption is granted, file one annual report pursuant to section 39-2-117 (3)(a) for all parcels in connection with the subdivision, but the filing must be accompanied by a payment in accordance with section 39-2-117 (3)(a) in an amount not to exceed the aggregate amount of payments that would be required if individual reports were filed for each parcel.
(b)
Notwithstanding subsection (7)(a)(II) of this section, if the real property that is allowed an exemption pursuant to this section has been subdivided but the subdivided parcel has been split into a separate taxable parcel from the improvements and is leased to the owner of the improvements as an affordable homeownership property, then the owner of such real property or the owner's agent must file an individual annual report for the subdivided parcel in accordance with section 39-2-117 (3)(a).
Amended by 2024 Ch. 295,§ 14, eff. 8/7/2024, app. to applications submitted and annual reports filed pursuant to section 39-2-117, C.R.S., for the exemption allowed by section 39-3-127.7, C.R.S., on or after the applicable effective date.
Added by 2023 Ch. 260,§ 3, eff. 8/7/2023.
2024 Ch. 295, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
2023 Ch. 260, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
This section is set out more than once due to postponed, multiple, or conflicting amendments.