HB 103

                                1  HOUSE BILL 103
                                2     57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
                                3  INTRODUCED BY
                                4        Cristina Parajón and Heather Berghmans and Rod Montoya
                                5
                                6
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                                10  AN ACT
                                11   RELATING TO TAXATION; ALLOWING A LIMITATION ON INCREASES IN
                                12   VALUATION OF RESIDENTIAL PROPERTY IF THE ZONING OF THE PROPERTY
                                13   HAS CHANGED.
                                14
                                15   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
                                16        SECTION 1.    Section 7-36-21.2 NMSA 1978 (being Laws 2000,
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                                17   Chapter 10, Section 2, as amended) is amended to read:
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                                18        "7-36-21.2.    LIMITATION ON INCREASES IN VALUATION OF
                                19   RESIDENTIAL PROPERTY.--
                                20  A.   Residential property shall be valued at its
                                21   current and correct value in accordance with the provisions of
                                22   the Property Tax Code; provided that for the 2001 and
                                23   subsequent tax years, the value of a property in any tax year
                                24   shall not exceed the higher of one hundred three percent of the
                                25   value in the tax year prior to the tax year in which the
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                                1    property is being valued or one hundred six and one-tenth
                                2    percent of the value in the tax year two years prior to the tax
                                3    year in which the property is being valued.     This limitation on
                                4    increases in value does not apply to:
                                5  (1)   a residential property in the first tax
                                6    year that it is valued for property taxation purposes;
                                7  (2)   any physical improvements, except for
                                8    solar energy system installations, made to the property during
                                9    the year immediately prior to the tax year or omitted in a
                                10   prior tax year; or
                                11  (3)   valuation of a residential property in any
                                12   tax year in which:
                                13  (a)   a change of ownership of the
                                14   property occurred in the year immediately prior to the tax year
                                15   for which the value of the property for property taxation
                                16   purposes is being determined; or
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                                17  (b)   the use [or zoning] of the property
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                                18   has changed in the year prior to the tax year.
                                19  B.   If a change of ownership of residential property
                                20   occurred in the year immediately prior to the tax year for
                                21   which the value of the property for property taxation purposes
                                22   is being determined, the value of the property shall be its
                                23   current and correct value as determined pursuant to the general
                                24   valuation provisions of the Property Tax Code.
                                25  C.   To assure that the values of residential
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                                1    property for property taxation purposes are at current and
                                2    correct values in all counties prior to application of the
                                3    limitation in Subsection A of this section, the department
                                4    shall determine for the 2000 tax year the sales ratio pursuant
                                5    to Section 7-36-18 NMSA 1978 or, if a sales ratio cannot be
                                6    determined pursuant to that section, conduct a sales-ratio
                                7    analysis using both independent appraisals by the department
                                8    and sales.    If the sales ratio for a county for the 2000 tax
                                9    year is less than eighty-five, as measured by the median ratio
                                10   of value for property taxation purposes to sales price or
                                11   independent appraisal by the department, the county shall not
                                12   be subject to the limitations of Subsection A of this section
                                13   and shall conduct a reassessment of residential property in the
                                14   county so that, by the 2003 tax year, the sales ratio is at
                                15   least eighty-five.     After such reassessment, the limitation on
                                16   increases in valuation in this section shall apply in those
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                                17   counties in the earlier of the 2004 tax year or the first tax
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                                18   year following the tax year that the county has a sales ratio
                                19   of eighty-five or higher, as measured by the median ratio of
                                20   value for property taxation purposes to sales value or
                                21   independent appraisal by the department.     Thereafter, the
                                22   limitation on increases in valuation of residential property
                                23   for property taxation purposes in this section shall apply to
                                24   subsequent tax years in all counties.
                                25  D.   The provisions of this section do not apply to
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                                1    residential property for any tax year in which the property is
                                2    subject to the valuation limitation in Section 7-36-21.3 NMSA
                                3    1978.
                                4  E.   As used in this section, "change of ownership"
                                5    means a transfer to a transferee by a transferor of all or any
                                6    part of the transferor's legal or equitable ownership interest
                                7    in residential property except for a transfer:
                                8  (1)   to a trustee for the beneficial use of the
                                9    spouse of the transferor or the surviving spouse of a deceased
                                10   transferor;
                                11  (2)   to the spouse of the transferor that takes
                                12   effect upon the death of the transferor;
                                13  (3)   that creates, transfers or terminates,
                                14   solely between spouses, any co-owner's interest;
                                15  (4)   to a child of the transferor, who occupies
                                16   the property as that person's principal residence at the time
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                                17   of transfer; provided that the first subsequent tax year in
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                                18   which that person does not qualify for the head of household
                                19   exemption on that property, a change of ownership shall be
                                20   deemed to have occurred;
                                21  (5)   that confirms or corrects a previous
                                22   transfer made by a document that was recorded in the real
                                23   estate records of the county in which the real property is
                                24   located;
                                25  (6)   for the purpose of quieting the title to
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                                1    real property or resolving a disputed location of a real
                                2    property boundary;
                                3  (7)   to a revocable trust by the transferor
                                4    with the transferor, the transferor's spouse or a child of the
                                5    transferor as beneficiary; or
                                6  (8)   from a revocable trust described in
                                7    Paragraph (7) of this subsection back to the settlor or trustor
                                8    or to the beneficiaries of the trust.
                                9  F.   As used in this section, "solar energy system
                                10   installation" means an installation that is used to provide
                                11   space heat, hot water or electricity to the property in which
                                12   it is installed and is:
                                13  (1)   an installation that uses solar panels
                                14   that are not also windows;
                                15  (2)   a dark-colored water tank exposed to
                                16   sunlight; or
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                                17  (3)   a non-vented trombe wall."
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                                18  SECTION 2.    APPLICABILITY.--The provisions of this act
                                19   apply to property tax years beginning on or after January 1,
                                20   2026.
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