You asked for the description of the law regarding the assessment of affordable housing that is subject to a sales price restriction. You asked for possible legislative options to minimize the taxation of such housing to maintain its affordability.

With limited exceptions that do not apply to affordable housing, real property must be assessed based on its “present true and actual” value (CGS § 12-64). The law allows assessors to determine the actual value based on (1) comparable sales, (2) the income the property produces, or (3) the cost of building a replacement for the property. Whitney Center, Inc. v. Town of Hamden, 4 Conn. App. 426 (1985). In practice, assessors generally value owner-occupied housing based on comparable sales, but if there are no comparable sales or if recent sales do not accurately reflect market values (e. g. , they resulted from foreclosures), the assessor can use the other approaches.

Assessors must consider everything that might legitimately affect a property’s value in assessing for tax purposes. Chamber of Commerce of Greater Waterbury, Inc. v. City of Waterbury, 184 Conn. 333 (1981). Presumably, this would include a restriction on the sales price if the assessor was aware of the restriction. CGS § 12-81bb allows, but does not require, municipalities to provide property tax credits for housing that is subject to deed restrictions that make it affordable for people whose income is up to 80% of the area or state median, whichever is less.

If a homeowner believes that the assessors have erred in valuing his property, he can appeal to the town’s board of assessment appeals under CGS § 12-111. The homeowner usually must file his appeal by February 20^th for the previous year’s assessment. The board’s determination can be appealed to the courts. Under limited circumstances, a homeowner can appeal directly to the courts under CGS § 12-119.

The legislature has several options in addressing the situation that prompted your questions. It could amend CGS § 12-64 to establish a rebuttable presumption that the actual value of property subject to a sales price restriction is the maximum price allowed under that restriction. More broadly, the legislature could amend this section to specifically require that assessors take into account any deed restriction that affects the market value of the property. These would include not only sales price restrictions but also restrictions on the maximum income a subsequent purchaser can have (a provision often used in connection with affordable housing) or conservation easements. Finally, the legislature could require that any restriction in the sales price of affordable housing be included in the deed, so that assessors would be made aware of the restriction.

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