Georgia Supreme Court Ruling: A Win for LIHTC Property Owners

For investors in Low-Income Housing Tax Credit (LIHTC) properties in Georgia, a recent ruling by the Georgia Supreme Court could significantly impact property taxes moving forward. In recent years, tax assessors argued that the income approach to property valuation did not apply to LIHTC properties unless the Section 42 tax credits realized in operation (i.e., federal incentives created under Section 42 of the Internal Revenue Code that provide dollar-for-dollar reductions) generated actual income. However, the Georgia Supreme Court recently clarified this interpretation is incorrect, reaffirming the importance of the income approach to accurately reflect a property’s fair market value.

Why does this matter? The income approach is particularly beneficial for LIHTC properties, which often have rent restrictions and serve tenants with lower incomes. Thus, rental income is typically below market rates, even in high-demand areas. By using the income approach, rather than a sales comparable valuation, taxpayers receive a more accurate valuation based on the asset’s actual income—freeing property owners from overtaxation.

What does this mean for you? Investors in LIHTC properties could pay less in property taxes moving forward, increasing capital for reinvestment, growth, and long-term prosperity.

If you own or manage LIHTC properties in Georgia, let’s connect. We would love to ensure that you or your investors are only paying the taxes legally required, maximizing investment potential.