Judicial District of New Britain


       Taxation; Whether Assessor Properly Considered Federal Tax Credits Issued to Subsidize Construction of Income-Restricted Rental Property in Valuing Property; Whether Fair Market Value of Income-Restricted Rental Property Should be Determined Based on Income Capitalization Formula in General Statutes § 8-216a (a).  The plaintiff owns real property in Colchester that includes an age and income-restricted apartment complex, the construction of which was subsidized with federal low-income housing tax credits (LIHTC).  The plaintiff, pursuant to General Statutes § 12-117a, brought this tax appeal from a decision of the town’s board of assessment appeals upholding the assessor's determination that the fair market value of the property for the grand list of October 1, 2011, was $2,286,429.  The trial court rendered judgment for the town on finding that the plaintiff did not establish that its property had been overassessed.  The plaintiff appeals, challenging the trial court’s rejection of its claim that the assessor, in determining the fair market value of the property, improperly took into consideration LIHTC.  The plaintiff claims that the fair market value of the property should be determined in accordance with General Statutes § 8-216a (a), which directs the assessor, in valuing any property used for housing “low or moderate-income persons or families,” to utilize the income capitalization formula set forth in that statute.  The plaintiff argues that the legislature, recognizing that there is no actual market value for heavily restricted subsidized housing projects, set forth the only method for valuing such properties in § 8-216a (a) and that the town’s failure to pass an ordinance for the abatement of real estate property taxes for subsidized housing pursuant to General Statutes § 8-215 does not preclude the application of § 8-216a (a).  The plaintiff further maintains that the legislature did not intend for federal tax credits, such as LIHTC, to be included in the fair market value of the property under § 8-216a (a), and posits that inclusion of LIHTC into the fair market value would not be in the public interest because it would reduce the incentive for investment in public housing.  Additionally, the plaintiff claims that the consideration of LIHTC when determining the fair market value of the property for tax assessment purposes directly frustrates the purpose of the federal subsidy and, therefore, violates the supremacy clause of the federal constitution.