Supes say no to tax breaks for housing
Wednesday, August 20, 2014 1:00 PM
Madison County Supervisors voted to not give tax relief to Section 515 housing developers during a tax equalization hearing on Monday.
Properties included in the decision were Crestview Apartments, Canton Village Apartments, Madison Heights Apartments, Canton Manor Apartments, Royal Estates Apartments, Canton Villas and Pecan Village Apartments.
Attorney Jim Martin with Taggart Rimes & Graham PLLC argued that there should be relief similar to the kind given to Section 42 housing projects.
"These are all low income, affordable housing properties," Martin said. "They don't have the tax credits, but they do have interest credits as part of their program."
Martin said that, in essence, a nine percent amortized mortgage rate is reduced to one percent via the U.S. Department of Agriculture and the interest break should not be taxed because it's just an accounting measure.
"This is a monthly accounting adjustment to that particular property owner's account," he said. "In difference to (Madison County Tax Assessor Gerald Barber), they have included that interest credit as income. These properties are being taxed on that income that never existed."
Norman Cannady, chief appraiser for the Tax Assessor's Office, said the mortgage is subsidized and that's included when "capitalizing the income string."
"The mortgage interest rate is offset due to a credit," he said. "In turn they are paying a lower interest rate then what the original agreement stipulates."
Barber's position, which was supported by the board's decision, was that the properties should be assessed at higher values.
"They have some apartment complexes (on their figures) being only worth $177,000," he said. "That's not even a median house in Madison for a whole apartment complex. I guarantee you apartment complexes would want more than $177,000 if they burned down."
Last year, during a similar equalization hearing, supervisors did not grant tax relief to the same apartments.
"I do not see anything changing from last year," District 3 Supervisor Gerald Steen said before making a motion to deny the request. It was seconded by Board President Karl Banks and passed unanimously.
The hearing came on the heels of a recent Mississippi Supreme Court decision that said due to legislation enacted in 2005, Section 42 housing credits are not taxable, therefore giving developers a huge tax relief on such properties.