Taxation of Resale Restricted Housing

By Carla Robinson
Published March 2008 by the Lincoln Institute

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Resale-restricted, owner-occupied housing (sometimes referred to as “shared-equity homeownership”) offers an option for bringing homeownership within reach for lower income households. Few standardized policies and procedures exist for valuing and taxing resale-restricted homes, even in states where public policy favors this category of housing. To date, almost no research has been done in the United States to document the various ways this housing is taxed or to analyze what the best method of taxation might be. This paper published by the Lincoln Institute aims to fill this information gap by addressing the following questions.

1. What judicial, legislative, or administrative guidance is given to municipal tax assessors within each state with regard to the valuation and taxation of resale-restricted, owner-occupied homes?
2. How do the legal requirements, policy guidelines, and administrative procedures for the taxation of resale-restricted, owner-occupied housing differ from one state to another?

The paper presents information about the treatment of shared-equity housing in five states: California; Massachusetts; New Jersey; New York; and Vermont. The findings suggest that restrictions placed on owner-occupied, shared-equity homes and the consideration of those restrictions in the valuation of the homes can be part of a comprehensive approach to develop and preserve affordable housing.