2017 Capitalization Rate For Low Income Housing Development Properties

Pursuant to Section 11.1825(r), Texas Property Tax Code, the McLennan County Appraisal District gives public notice of the capitalization rate utilized for the 2017 tax year to value properties receiving exemptions under this section. Specifically, the chief appraiser must appraise the property using the income method, consider the restrictions on who may rent the property and the amount of rent to be charged. Rent restricted properties vary widely. These variations can have an effect on the valuation of the property. The McLennan County Appraisal District intends to apply the same capitalization rate to community housing development organizations (CHDOs) as used for all other rent restricted properties in McLennan County. An overall capitalization rate between 7.25% and 9.0% will be used to appraise these properties; although adjustments may be made on the individual characteristics of each property and the information provided to the chief appraiser as required under Section 11.182(d) and (g), Texas Property Tax Code.