Home » NEWS » County goes to cost-approach policy on Section 42 housing

County goes to cost-approach policy on Section 42 housing

COLUMBUS — Lowndes County is changing how it determines the value of Section 42 low-income house for tax purposes.

Tax collector/assessor Greg Andrews tells the Commercial Dispatch the county will start using a “cost” approach.

“The cost approach means I measure a house and price it by the square footage and we note whether the home is made of brick or wood, etc. We have a system that assesses the house based on a formula,” Andrews said.

The current method of assessment is based on the income of the housing for its owners.

The Mississippi Legislature embraced the housing tax credit program in 2005. Counties and cities have unsuccessfully lobbied lawmakers to repeal the tax break.

So-called Section 42 developers use federal tax credits to build rental complexes for people who qualify for affordable housing.

Under the law, the developers are assessed by the income generated from the rental units rather than the cost of the real property. That formula causes counties to assess other taxpayers at higher rates to make up the difference, local officials contend.

“Section 42 is very complex across the state,” Andrews said. “The state law says two different things in the same law and that has created some confusion. Humphreys County is saying if the owners want to be assessed by the income method, they need to report all of their income, including about $2 million they get in federal credits each year they currently aren’t getting.”

Andrews said discussions with lawmakers are ongoing.

About Megan Wright

Leave a Reply

Your email address will not be published. Required fields are marked *