| CLTs and Property Taxes
Property taxes on CLT lands and homes are most often paid by the homebuyer, although some CLT’s pay the real estate taxes on the land while the homebuyers pay the taxes on their homes. The latter is possible only in jurisdictions that are able and willing to separate the taxes for the land and for the improvements and bill them separately. Yes, in response to an often asked question, CLT lands ARE taxable. The sticky wicket is how they should be assessed. This is currently a largely unresolved issue for many CLTs and there are perhaps as many different views on the matter as there are county tax assessors! CLT’s often make the point that CLT lands and homes should not be assessed at full market value, as they are essentially off the market. CLT lands are paid for once and their value never changes as long as held in trust by the CLT. The resale value of CLT homes is significantly limited through the ground lease resale formula which determines the homes actual resale value at any point in time. There are few communities that have a sufficient enough supply of CLT homes that have experienced resales so as to provide “comparable” values for assessors. For a discussion of property tax issues and CLT’s, see this interesting article posted on the Burlington Associates in Community Development’s web site:
http://www.burlingtonassociates.com/resources/
archives/public_policy/000078.html
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