Guam – Senator Joe San Agustin has introduced a bill he hopes will encourage the development of more affordable housing.
Bill 150 would create a new property tax rate for real property that qualifies as low-income housing. The new rate should allow for lower taxes for developers who build low income housing. The bill would require that the appraised property values for tax purposes be calculated by dividing the property’s net operating income by a 9.41% capitalization rate. For example, if a property generates net operating income of $100 thousand dollars then that property would have an appraised value of $100 thousand divided by 9.41% or $1,062,699. Taxes are then assessed at 70% of that appraised value or $743,889. This figure would then be multiplied by the applicable millage rate.
“Bill 150, it’s a credit before, you see we have developers on Guam that want to develop and build a lot of low income residences,” said Senator San Agustin adding, “It gives the developer the tax credit before any other credits so that the intent of this was so that the developer will reduce the rental cost of those homes.”
Senator San Agustin says that this would help low income families who don’t qualify for section 8 and other low-income housing programs.