Senate panel lowers institutional‑owner threshold and advances measure taxing very large single‑family rental portfolios

Senators on the Finance Committee advanced legislation that would give local governments new authority to raise the property tax assessment rate on very large single‑family rental owners, moving the bill forward after lawmakers adopted an amendment lowering the threshold for heightened treatment.

The sponsor of SB576 told the committee the bill is designed to discourage large institutional investors from purchasing single‑family homes that otherwise would be available to individual buyers. Under the bill as amended, a local government could choose to assess owners who exceed a specified threshold of single‑family residences at up to 100% of fair‑market value instead of the current 40% assessment ratio for single‑family properties. The sponsor framed the change as a financial disincentive, not an outright ban on ownership.

Supporters said allowing local officials to use dollars rather than direct limits would protect smaller owners while deterring large‑scale aggregation. The sponsor said counties that opt to use an income approach may request owners’ income information and that owners would be required to attest to their holdings in the state; false attestations could trigger back taxes and penalties.

Opponents warned the higher assessment could be passed through to renters or prompt rapid divestment that floods local housing markets. One senator asked whether the change could lead to a sudden surge of inventory and unintended short‑term disruption for local communities. The sponsor countered that any market dislocation would be mitigated by mortgage qualification constraints and that local discretion allows counties to set assessment rates below 100 percent if they prefer.

The committee debated the appropriate threshold at length. The bill originally defined a ‘‘community housing provider’’ negatively as an owner of fewer than 2,000 single‑family residences; after floor and committee discussion members proposed reducing the threshold to 500 for consistency with companion proposals. A recorded raise of hands on the amendment, as announced by the chair, showed 10 in favor and 2 opposed; the amendment carried and the bill moved forward as amended.

The committee also clarified the bill applies to single‑family residential property only, not to multifamily apartment buildings, and that local officials retain discretion over the precise assessment percentage (up to 100 percent). The sponsor indicated willingness to accept further amendments, including lowering the threshold, during later consideration.

The committee passed the bill as amended and sent it on to the next stage of the legislative process.