2023 District of Columbia Code › Title 47 - Taxation, Licensing, Permits, Assessments, and Fees. [Enacted title] › Chapter 10 - Property Exempt from Taxation › § 47–1005.02. Nonprofit affordable housing developer tax relief

§ 47–1005.02. Nonprofit affordable housing developer tax relief.
(a)(1) Real property eligible for the low-income housing tax credit provided by section 42 of the Internal Revenue Code of 1986, approved October 22, 1986 (100 Stat. 2189; 26 U.S.C. § 42), ("affordable housing") that is owned by or leased to an organization that is not organized or operated for private gain, or that is owned by or leased to an entity controlled, directly or indirectly, by such an organization, for which a certification has been made as to both the real property and owner or lessee pursuant to subsection (b)(1) of this section (and that has not been revoked under subsection (b)(2) of this section) shall be exempt from the taxes imposed by Chapters 8 and 10 of this title and from a payment in lieu of tax imposed under § 47-1002(20) during the time that the real property is being developed for or being used as affordable housing and is subject to restrictive covenants governing the income of residents that occupy the affordable housing units during the federal low-income housing tax credit compliance period, including any extended use period; provided, that if the property is eligible for the tax relief provided by this subsection in part because it is leased to an organization that is not organized or operated for private gain, or is leased to an entity controlled, directly or indirectly, by such an organization, the owner and lessee shall certify to the Mayor, and the Mayor shall confirm, that the value of the tax abatement provided by this subsection will be passed through to the lessee.
(2) The conveyance of a property to an owner or lessee for which a certification as to both the property and owner or lessee has been made pursuant to subsection (b)(1) of this section (and that has not been revoked under subsection (b)(2) of this section) shall be exempt from the tax imposed by Chapter 11 of Title 42, and the transfer of any of property by an owner or lessee for which a certification as to both the property and owner or lessee has been made pursuant to subsection (b)(1) of this section (and that has not been revoked under subsection (b)(2) of this section) shall be exempt from the tax imposed by Chapter 9 of Title 47. Unless waived by regulation, a copy of the certification shall accompany the deed at the time it is submitted for recordation in order to claim an exemption.
(3) A security interest instrument, including a mortgage or deed of trust, securing debt incurred to acquire, develop, or redevelop property described in paragraph (1) of this subsection, or a refinancing or modification of a debt on such property, shall be exempt from the tax imposed by Chapter 11 of Title 42; provided, that a certification of exemption has been made pursuant to subsection (b)(1) of this section with respect to both the owner granting the security interest and the property encumbered by the security interest. Unless waived by regulation, to claim an exemption, a copy of the certification of exemption shall accompany the security interest instrument at the time it is submitted for recordation.
(a-1)(1) Real property shall be exempt from the taxes imposed by Chanpters 8 and 10 of this title and from a payment in lieu of tax imposed under § 47-1002(20), for the time period set forth in paragraph (2) of this subsection, if:
(A) The real property is owned by or leased to a nonprofit owner, as defined by § 47-1005.03(a)(2), or leased to a nonprofit organization that provides rental housing in buildings that it owns and that satisfies the requirements of § 47-1005.03(a)(2)(B);
(B) Affordable housing developed or to be developed on the real property has been awarded financial assistance in the form of a grant or a loan from the Housing Production Trust Fund or other District government low-income housing financing assistance program designated by the Mayor to provide housing affordable to households earning not in excess of 80% of the adjusted median income, as defined by § 47-1005.03(a)(1);
(C) The financial assistance described in subparagraph (B) of this paragraph was awarded after August 23, 2021;
(D) A certification as to both the real property and owner or lessee has been made pursuant to subsection (b)(1) of this section (and that has not been revoked under subsection (b)(2) of this section); and
(E) The real property is subject to, and in compliance with, restrictive covenants governing the income of residents that occupy or will occupy the affordable housing units developed or to be developed on the real property.
(2) Real property described in paragraph (1) of this subsection shall be exempt from the taxes imposed by Chapters 8 and 10 of this title and from a payment in lieu of tax imposed under § 47-1002(20) during the time that the real property is being developed for or being used as affordable housing.
(b)(1) The Mayor shall certify to the Office of Tax and Revenue ("OTR") each property and owner or lessee eligible for an exemption. The certification shall identify:
(A) The property to which the certification applies by square and lot, or parcel or reservation number;
(B) The full legal name of the owner or lessee, including taxpayer identification number, that is eligible;
(C) The tax or taxes to which the certification applies;
(D) The portion of the property that is eligible;
(E) The effective date of the exemption, which shall be:
(i) In the case of an application by an eligible owner, the date on which the eligible owner acquired the real property or October 1, 2012, whichever is later; and
(ii) In the case of an application by an eligible lessee, the date on which the eligible lessee leased the real property, or October 1, 2021, whichever is later.
(F) Any other information OTR shall require to administer the exemption.
(2) The Mayor shall notify OTR if any property, owner, or lessee certified as eligible under paragraph (1) of this subsection becomes ineligible for the exemptions under subsection (a) or (a-1) of this section. The notification shall identify:
(A) The property to which the notice applies by square and lot or parcel or reservation number;
(B) The full legal name of the owner or lessee, including taxpayer identification number;
(C) The tax or taxes to which the notice applies;
(D) The portion of the property ineligible;
(E) The date on which the property, owner, or lessee became ineligible; and
(F) Any other information OTR shall require to administer the termination of the exemption.
(3) OTR shall administer the exemption provided under this section in the same manner as the exemptions provided under § 47-1002, and properties exempted under subsection (a) or (a-1) of this section shall be subject to §§ 47-1005, 47-1007, and 47-1009, except that an owner or lessee, whichever is applicable, shall not be required to file an application with OTR to qualify for an exemption.
(c) The grant of a tax exemption as provided in this section shall be in addition to, and not in lieu of, any other tax relief or assistance from any other source applicable to either the real property or its owner or lessee.
(d) This section shall apply for real property tax years beginning after September 30, 2012.
(Sept. 20, 2012, D.C. Law 19-168, § 7132(b), 59 DCR 8025; Dec. 24, 2013, D.C. Law 20-61, § 7154(a), 60 DCR 12472; Dec. 13, 2017, D.C. Law 22-33, § 7232(b)(2), 64 DCR 7652; Oct. 30, 2018, D.C. Law 22-168, § 7093(b)(3), 65 DCR 9388; Nov. 13, 2021, D.C. Law 24-45, § 2062(a), 68 DCR 010163.)
Section References
This section is referenced in § 42-1102 and § 47-902.
Effect of Amendments
The 2013 amendment by D.C. Law 20-61 rewrote (a)(1).
Emergency Legislation
For temporary (90 days) amendment of this section, see § 2062(a) of Fiscal Year 2022 Budget Support Emergency Act of 2021 (D.C. Act 24-159, Aug. 23, 2021, 68 DCR 008602).
For temporary (90 days) amendment of this section, see § 7093(b)(2) of Fiscal Year 2019 Budget Support Congressional Review Emergency Act of 2018 (D.C. Act 22-458, Oct. 3, 2018, 65 DCR 11212).
For temporary (90 days) amendment of this section, see § 7093(b)(2) of Fiscal Year 2019 Budget Support Emergency Act of 2018 (D.C. Act 22-434, July 30, 2018, 65 DCR 8200).
For temporary (90 days) amendment of this section, see § 7232(b)(2) of Fiscal Year 2018 Budget Support Congressional Review Emergency Act of 2017 (D.C. Act 22-167, Oct. 24, 2017, 64 DCR 10802).
For temporary (90 days) amendment of this section, see § 7232(b)(2) of Fiscal Year 2018 Budget Support Emergency Act of 2017 (D.C. Act 22-104, July 20, 2017, 64 DCR 7032).
For temporary amendment of (a)(1), see § 102 of the Fiscal Year 2013 Budget Support Technical Clarification Emergency Amendment Act of 2012 (D.C. Act 19-482, October 12, 2012, 59 DCR 12478).
For temporary amendment of (a)(1), see § 102 of the Fiscal Year 2013 Budget Support Technical Clarification Congressional Review Emergency Amendment Act of 2012 (D.C. Act 19-604, January 14, 2013, 60 DCR 1045), applicable as of January 10, 2013.
For temporary (90 days) amendment of this section, see § 7154 of the Fiscal Year 2014 Budget Support Emergency Act of 2013 (D.C. Act 20-130, July 30, 2013, 60 DCR 11384, 20 DCSTAT 1827).
For temporary (90 days) amendment of this section, see § 7154 of the Fiscal Year 2014 Budget Support Congressional Review Emergency Act of 2013 (D.C. Act 20-204, October 17, 2013, 60 DCR 15341, 20 DCSTAT 2311).
Temporary Legislation
Section 102 of D.C. Law 19-226 amended subsection (a)(1) of this section to read as follows:
“(a)(1) Property eligible for the low-income housing tax credit provided by section 42 of the Internal Revenue Code, (‘affordable housing’ ) that is owned by an organization that is not organized or operated for private gain, or that is owned by an entity controlled, directly or indirectly, by such an organization, shall be exempt from the tax imposed by Chapter 8 of this title and from a payment in lieu of tax imposed under § 47-1002(20) during the time that the real property is being developed for or being used as affordable housing and is subject to restrictive covenants governing income during the federal low-income housing tax credit compliance period, including any extended use period.”
Section 402(b) of D.C. Law 19-226 provided that the act shall expire after 225 days of its having taken effect.
Short Title
Section 7151 of D.C. Law 20-61 provided that Subtitle O of Title VII of the act may be cited as the “Tax Clarification Amendment Act of 2013”.
Editor's Notes
Applicability of D.C. Law 20-61: Section 7154(b) of D.C. Law 20-61 provided that § 7154(a) (which amended § 47-1005.02(a)(1)) shall apply as of September 20, 2012.