CAP RESIDENTIAL PROPERTY TAX RATES

HB0103

HOUSE BILL 103

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Cristina Parajón
and
Heather Berghmans
and
Rod Montoya

AN ACT

RELATING TO TAXATION; ALLOWING A LIMITATION ON INCREASES IN
VALUATION OF RESIDENTIAL PROPERTY IF THE ZONING OF THE PROPERTY
HAS CHANGED.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
Section 7-36-21.2 NMSA 1978 (being Laws 2000,
Chapter 10, Section 2, as amended) is amended to read:

"7-36-21.2. LIMITATION ON INCREASES IN VALUATION OF
RESIDENTIAL PROPERTY.--

A. Residential property shall be valued at its
current and correct value in accordance with the provisions of
the Property Tax Code; provided that for the 2001 and
subsequent tax years, the value of a property in any tax year
shall not exceed the higher of one hundred three percent of the
value in the tax year prior to the tax year in which the
property is being valued or one hundred six and one-tenth
percent of the value in the tax year two years prior to the tax
year in which the property is being valued. This limitation on
increases in value does not apply to:

(1) a residential property in the first tax
year that it is valued for property taxation purposes;

(2) any physical improvements, except for
solar energy system installations, made to the property during
the year immediately prior to the tax year or omitted in a
prior tax year; or

(3) valuation of a residential property in any
tax year in which:

(a) a change of ownership of the
property occurred in the year immediately prior to the tax year
for which the value of the property for property taxation
purposes is being determined; or

(b) the use [
or zoning
] of the property
has changed in the year prior to the tax year.

B. If a change of ownership of residential property
occurred in the year immediately prior to the tax year for
which the value of the property for property taxation purposes
is being determined, the value of the property shall be its
current and correct value as determined pursuant to the general
valuation provisions of the Property Tax Code.

C. To assure that the values of residential
property for property taxation purposes are at current and
correct values in all counties prior to application of the
limitation in Subsection A of this section, the department
shall determine for the 2000 tax year the sales ratio pursuant
to Section 7-36-18 NMSA 1978 or, if a sales ratio cannot be
determined pursuant to that section, conduct a sales-ratio
analysis using both independent appraisals by the department
and sales. If the sales ratio for a county for the 2000 tax
year is less than eighty-five, as measured by the median ratio
of value for property taxation purposes to sales price or
independent appraisal by the department, the county shall not
be subject to the limitations of Subsection A of this section
and shall conduct a reassessment of residential property in the
county so that, by the 2003 tax year, the sales ratio is at
least eighty-five. After such reassessment, the limitation on
increases in valuation in this section shall apply in those
counties in the earlier of the 2004 tax year or the first tax
year following the tax year that the county has a sales ratio
of eighty-five or higher, as measured by the median ratio of
value for property taxation purposes to sales value or
independent appraisal by the department. Thereafter, the
limitation on increases in valuation of residential property
for property taxation purposes in this section shall apply to
subsequent tax years in all counties.

D. The provisions of this section do not apply to
residential property for any tax year in which the property is
subject to the valuation limitation in Section 7-36-21.3 NMSA
1978.

E. As used in this section, "change of ownership"
means a transfer to a transferee by a transferor of all or any
part of the transferor's legal or equitable ownership interest
in residential property except for a transfer:

(1) to a trustee for the beneficial use of the
spouse of the transferor or the surviving spouse of a deceased
transferor;

(2) to the spouse of the transferor that takes
effect upon the death of the transferor;

(3) that creates, transfers or terminates,
solely between spouses, any co-owner's interest;

(4) to a child of the transferor, who occupies
the property as that person's principal residence at the time
of transfer; provided that the first subsequent tax year in
which that person does not qualify for the head of household
exemption on that property, a change of ownership shall be
deemed to have occurred;

(5) that confirms or corrects a previous
transfer made by a document that was recorded in the real
estate records of the county in which the real property is
located;

(6) for the purpose of quieting the title to
real property or resolving a disputed location of a real
property boundary;

(7) to a revocable trust by the transferor
with the transferor, the transferor's spouse or a child of the
transferor as beneficiary; or

(8) from a revocable trust described in
Paragraph (7) of this subsection back to the settlor or trustor
or to the beneficiaries of the trust.

F. As used in this section, "solar energy system
installation" means an installation that is used to provide
space heat, hot water or electricity to the property in which
it is installed and is:

(1) an installation that uses solar panels
that are not also windows;

(2) a dark-colored water tank exposed to
sunlight; or

(3) a non-vented trombe wall."

SECTION 2.
APPLICABILITY.--The provisions of this act
apply to property tax years beginning on or after January 1,
2026.

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