Illinois Administrative Code › Title 86 - REVENUE › Part 110 - LEVELING THE PLAYING FIELD FOR ILLINOIS RETAIL ACT › Section 110.112 - Procedures for Assessment of Section 515 Low-income Housing Projects

Current through Register Vol. 48, No. 28, July 12, 2024
a) Definitions
"Section 515 low-income housing project" means a rental
				apartment facility: developed and managed under a United States Department of
				Agriculture Rural Rental Housing Program designed to provide affordable housing
				to low to moderate income families (as defined in
				42 USC
				1437 ) and seniors in rural communities with
				populations under 20,000; that receives a subsidy in the form of a 1% loan
				interest rate and a 50-year amortization of the mortgage; that would not have
				been built without a Section 515 interest credit subsidy; and where the owner
				of the project is limited to an annual profit of an 8% return on a 5% equity
				investment. [35
				ILCS 200/10-240 ]
"Section 515 low-income housing project certificate" means a
				document issued to the owner of the property by the State Director of the
				United States Department of Agriculture, Rural Development Office, certifying
				that the property described in that document qualifies for assessment as a
				Section 515 low-income housing project.
b) Assessment of Section 515 Low-income
			 Housing Projects
Beginning on January 1, 2000, except in counties of more than
				200,000 that classify property for the purpose of taxation, local property
				assessment officers shall assess property that has been certified for the year
				of assessment as a Section 515 low-income housing project in accordance with
				Section 10-245 of the Property Tax Code [35 ILCS
				200/10-245 ] and the method of valuation provided in
				this Part. [35
				ILCS 200/10-250 ]
c) Certification
For a rental apartment facility to be certified as a Section
				515 low-income housing project, the owner must file an application for a
				Section 515 low-income housing project certificate with the State Director of
				the United States Department of Agriculture, Rural Development Office, in the
				form and manner prescribed in regulations issued by that office. If the
				application is approved, the office will issue to the owner a Section 515
				low-income housing project certificate for that property. [35
				ILCS 200/10-250 ]
d) Submittal of Certificate to Local
			 Assessment Office
For a Section 515 low-income housing project to be assessed
				under the method of valuation provided under subsection (e) of this Section,
				the owner must submit by the 1st day of April, for the year 2001 and
				thereafter, to the local assessment office a copy of the Section 515 low-income
				housing project certificate issued to him for that property, a copy of the
				financial statement for the applicable assessment year for that property filed
				with the United States Department of Agriculture, Rural Development Office, and
				any other information the local assessment office may request. [35 ILCS
				200/10-250 ]
e) Method of
			 Valuation
1) Local assessment officers shall
			 assess for local property tax purposes property that has been certified for the
			 year of assessment as a Section 515 low-income housing project at 331/3% of the
			 fair market value of its economic productivity to the owner. [35 ILCS
			 200/10-245 ]
2) The fair market value of the property's
			 economic productivity to the owner shall be determined by considering the
			 actual or probable net operating income attributable to the project, using a
			 vacancy rate of not more than 5%, capitalized at typical market rates for
			 similar, non-subsidized property. [35 ILCS 200/10-245 ]
3) In determining the net operating income
			 attributable to the property, property taxes paid cannot be considered as an
			 expense of any kind, and must be deducted if included as an expense in the
			 financial statement, and income and expense items not pertaining to the real
			 property itself cannot be considered in determining net operating income for
			 purposes of valuation under this Part.
4) For the purpose of determining the
			 interest rate to be used in developing the overall market value capitalization
			 rate for a Section 515 low-income housing project, local assessment officers
			 shall use an interest rate that reflects the prevailing cost of cash for other
			 types of commercial real estate in the geographic market area in which the
			 Section 515 low-income housing project is located. [35 ILCS
			 200/10-245]
5) Local assessment
			 officers shall use the effective tax rate as a component of the overall market
			 capitalization rate for purposes of valuation under this Part.