Concord - An LIHTC project for seniors got no breaks from the New Hampshire Board of Tax and Land Appeals. In Epping Senior Housing Associates, L.P., V. Town of Epping, the court ruled that LIHTCs must be factored into the value of the property for purposes of property tax assessment.

The LIHTCs were one of the bundle of rights that Epping Senior Housing Associates enjoyed by the purchase and development of the 40-unit Whispering Pines II, and so they should be counted in the valuation, explained John McSorley, assistant director of the property appraisal division of the New Hampshire Department of Revenue Administration.

The opinion was rendered in march and was a case of first impression, meaning that no court in the state had previously ruled on the LIHTC/property tax issue. Numerous out-of-state cases were cited by both sides, but the court gave weight to those that included the value of credits in the assessment. It said "the New Hampshire tax statutes do not distinguish between property rights that are 'tangible' [meaning land] and those that are 'intangible" [ meaning LIHTCs] in nature."

"Tax credits may run with the land, but they are subject to recapture if the property is sold, which operates as a dis-incentive to sell before the credit period runs out." said Elliott B. Pollack, chairman of the valuation section of Pullman & Comley, LLC, and the Connecticut member of the American Property Tax Counsel. Pollack recently reported on a later-decided Connecticut case that did not give value to the tax credits (see Affordable Housing Finance, July 2005, page 42.)

The New Hampshire court, however, said that under existing state law, this was the only decision it could reach and that it was up to the legislature to change how LIHTCs would be valued.