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Bill would exempt ADUs rented to Section 8 tenants from property tax on the unit; sponsors and housing authorities back pilot approach
Summary
AB 131 would allow a property-tax exemption limited to the accessory dwelling unit (ADU) portion of a parcel when the ADU is leased at least 12 months to a tenant using a Housing Choice Voucher (Section 8); sponsors said the program is voluntary, limited to one ADU per parcel, and requires annual verification by housing authorities to the county.
Assembly Bill 131 would provide a property-tax exemption for accessory dwelling units (ADUs) that are leased for at least 12 months to tenants receiving federal housing choice vouchers (Section 8), sponsors told the Ways and Means Committee.
Sponsor Assemblymember Jovan Jackson said the exemption is targeted to ADUs rented to voucher holders and would help create housing options for veterans, seniors and people with disabilities. Mindy Elliott, representing regional housing authorities including Southern Nevada Regional Housing Authority, Nevada Rural Housing Authority and Reno Housing Authority, said the proposal was intended as a practical, voluntary pilot that allows homeowners to add ADU rental capacity for voucher tenants.
Elliott said the exemption would apply only to the ADU (the brick-and-mortar portion) and not to the underlying land or the main residence; a housing authority would perform an initial inspection and provide annual verification to the county assessor to maintain the exemption. The bill includes limits: one exempt ADU per parcel, compliance with zoning and common-interest-community rules, and an annual verification requirement.
Washoe County staff testified neutrally and said assessors will need to inspect properties and that the exempted value would be the taxable assessed value of the ADU itself, not the main structure or land; Washoe said the program may cause modest reductions in local property-tax revenue but anticipated limited scope at first. Sponsor and housing authorities indicated a ramp-up period before implementation, with program start on July 1, 2026 to allow assessors and housing authorities to coordinate procedures.
Supporters emphasized the program's voluntary nature and the goal of increasing housing choice for voucher holders; no opposition witnesses appeared in person or by phone during the hearing recorded on the committee record.
