Low Income Housing Cap Rate

According to House Bill 3545, “not later than January 31 of each year,” the Appraisal District shall give public notice, including posting on the district’s website, the capitalization rate to be used that year to appraise property receiving exemption under this section. “Pursuant to Section 11.1825(r), Texas Property Tax Code,” the Appraisal District of Bell County gives public notice of the capitalization rate utilized for the 2026 tax year to value properties receiving exemptions under this section. Specifically, the chief appraiser must appraise the property using the income method, consider the restriction on who may rent the property and the amount of rent to be charged. Rent restricted properties vary widely. These variations can have an effect of the valuation of the property. The Tax Appraisal District of Bell County intends to apply the same capitalization rate to community housing developments (CHDOs) as used for all other rent restricted properties in Bell County. An overall capitalization rate between 5.50% and 7.00% will be used to appraise these properties; although adjustments may be made on the individual characteristics of each property and the information provided to the chief appraiser as required under Section 11.182 (d) and (g), Texas Property Tax Code.