Exemption from Real Property Taxes

Non-Profit Developers Exemption from Real Property Taxes
In order to be eligible for an exemption from real property taxes an apartment owner must be wholly owned, on a direct or indirect basis, by a non-profit organization which has received a determination letter from the Internal Revenue Code with respect to the requirements of Internal Revenue Code Section 501(c)(3). Additionally, the Maricopa County Assessor’s office will only provide partial exemptions to the extent that the property is actually occupied by tenants who fit one of the following 3 criteria:
  1. Documentation exists that the individual or family occupying an apartment unit has an income at or below 50% of the median income limit per HUD;
  2. Documentation exists that the person or family occupying the apartment unit is considered elderly (i.e., 62 years of age or older); or
  3. Documentation exists that the person or family occupying the apartment unit is a recipient of SSD payments.

Unless one of the above 3 criteria are met the individual apartment unit and applicable percentage of the apartment project will be taxed in the same manner as if the project were owned by a for-profit business. As an example if a 100-unit apartment project had 25 units which met 1 of the 3 criteria set forth above then the Assessor would give the project a 25% exemption from taxation.

Please note that if a non-profit organizations, which is the general partner in limited partnership which utilized private activity bonds and the 4% low income housing tax credit to finance the project will be treated as for-profit developers; despite the fact that 100% of the units may be available for persons or families meeting each of the above-reference criteria.