Pine Pointe Hous. LP v. Lowndes County Bd. of Tax Assessors

In 1996, Pine Pointe Housing , L. P. completed construction of a 71-unit rental housing project in Valdosta. Through an agreement with the Georgia Financing and Housing Authority, the property received an allocation of low-income housing tax credits under Section 42 of the Internal Revenue Code of 1986, as amended. Pine Pointe’s limited partnership structure allows the tax credits to “flow through” to the benefit of its limited partners. As required by federal law, Pine Pointe agreed to rent the property to low-income tenants at below-market rates for 15 years, and filed a restrictive covenant in the county deed records to that effect. The maximum credits available to the project were $448,120 per year for 10 years.

On July 28, 1997, Pine Pointe appealed the 1997 ad valorem tax assessment on the property to the Lowndes County Board of Equalization. The Lowndes County Board of Tax Assessors then appealed the ruling of the board of equalization to the superior court, which held a de novo hearing on November 20, 2000. At issue was the fair market value of the property as of January 1, 1997, and, in particular, how to value the property given the rental restrictions and federal tax benefits applicable to the project. On November 30, 2000, the trial court issued its order establishing the fair market value of the property at $4,709,000.