IAL 012808.

• Case Date: January 28, 2008
• Court: New Mexico

New Mexico Attorney Gen eral Opinions 2008. IAL 012808. January 28, 2008IAL 012808The Honorable Ben LujanSpeaker of the House New Mexico House of Representatives 05 Entrada Celedon y NestoraSanta Fe, NM 87506 Re: Opinion Request - Property Tax Assessments on Affordable HousingDear Representative Lujan: You have requested an Attorney General's opinion concerning the method of assessing owner-occupied residential housing provided under the County of Santa Fe's affordable housing ordinance (Santa Fe County Ordinance No. 2006-202, hereinafter "County Ordinance"). You ask whether, under New Mexico law, the phrase "market value" may be interpreted to permit a county to assess taxes on affordable housing on the basis of the diminished value of the property that is caused by deed or mortgage restrictions on the amount of appreciation value a homeowner may receive from resale of the home. We conclude, based on relevant New Mexico constitutional, statutory and case law authorities, and in light of the provisions of the County Ordinance that the proper method of assessment requires a determination of market value using sales of comparable property, without any modification.(fn1) The County Ordinance was adopted pursuant to the affordable housing exception to the anti-donation provision of Article IX, Section 14 of the New Mexico Constitution, as implemented by the Affordable Housing Act. Section 18 of the County Ordinance requires the imposition, at the time the affordable housing unit is sold to the first buyer, of an "Affordability" mortgage or lien in favor of the County. The Affordability lien reflects 95 percent of the value of the subsidy being provided by the County (which is the difference between the sales price and the amount paid by that homeowner or financed by a private lender who holds first mortgage position). Under the County Ordinance, that instrument must also contain a right of first refusal in favor of the County (in the event the homeowner wants to sell the home and has received an offer to purchase) to purchase the unit at the then-current fair market value. If the County does not exercise that right within the specified time, the owner may sell the unit to any buyer at an unrestricted price. In such case, however, the "Affordability" lien would have to be satisfied by payment to the County in the amount of the...