GOOD BILLS SB1235, sponsored by Sen. J.D. Mesnard (R-Chandler), codifies that possessory improvements on certain government-owned lands qualify for a limited property value and that county assessors must value them as real property rather than personal property. SIGNED INTO LAW 5/22/2019
SB1248, sponsored by Sen. Vince Leach (R-Tucson), protects the intent of Prop. 115 as passed in 2012 to limit the annual growth in the limited property value of locally assessed properties. SIGNED INTO LAW 6/7/2019
HB2673, sponsored by Rep. Jeff Weninger (R-Chandler), establishes a “Property Technology Sandbox” for businesses to test innovative products or services in the real estate industry. SIGNED INTO LAW 3/20/2019 BAD BILLS SB1147, sponsored by Sen. Vince Leach (R-Tucson), would have put burdensome requirements in place for cities to sell or lease municipal land or buildings for economic development activities and would have negatively impacted Government Property Lease Excise Tax (GPLET) projects. DIED
NAIOP scores huge win for developers with amendments to the Speculative Builders Tax! The Speculative Builders Tax is a city tax, outlined in the Model City Tax Code (MCTC), that is levied by cities on the sale of property by speculative builders. Due to broad definitions in the Model City Tax Code and the ability of each city to determine taxability, developers have faced unexpected tax bills and a lack of uniformity in tax treatment from city to city and from project to project.
Recently, NAIOP successfully achieved major changes to the MCTC that will effectively eliminate these problems. These improvements went into effect on April 1:
Clarify that redevelopment is not taxable. Only newly constructed buildings will be subject to the tax moving forward.
Prohibit pyramiding of the tax. An owner/developer will receive a tax credit for speculative builder taxes paid by the previous owner(s).
Prior improvements to land not taxed. When a developer sells raw land on which an improvement was constructed more than 24 months prior to sale, the property will not be subject to speculative builder tax.
Commercial property shells not taxed. When a developer builds a shell building and sells the property more than 24 months after substantial completion (certificate of completion) the property will not be subject to speculative builder tax. The addition of tenant improvements after the completion of the shell will not impact the taxability.
