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AB131

Property Tax Exemption for ADUs Rented with Housing Vouchers

Last scannedAug 22, 2026, 1:27 AM

In one sentence

This bill removes property taxes on small extra homes if they are rented to tenants using federal housing vouchers under specific conditions.

Exempts accessory dwelling units from property tax when rented to qualified voucher holders for at least 12 consecutive months.
Requires the unit to be located on the same parcel as a single-family home that is the owner's primary residence.
Mandates compliance with local zoning laws and community rules if in a common-interest development.
Limits the exemption to one accessory dwelling unit per land parcel.
Requires owners to file yearly proof of tenant assistance from public housing authorities and a copy of the lease with county assessors.
Directs county assessors to value these units based on replacement cost rather than market price.

The tax exemption only applies if the unit meets all local zoning laws and community rules.
Owners must provide annual verification from public housing authorities to keep the exemption active.
The bill takes effect for most purposes on July 1, 2026.

Plain language

Accessory Dwelling Unit (ADU): A secondary living space on the same lot as a single-family home with its own kitchen, bathroom, sleeping area, and exit.
Housing Choice Voucher Program: A federal program that helps low-income families pay for housing through tenant-based assistance payments.
Qualified Tenant: A renter who is not related to or employed by the property owner within three degrees of family connection.

Official record

Source attached

Provides an exemption from property taxation for accessory dwelling units rented or leased to certain tenants. (BDR 32-694)