NMSA 1978, § 7-36-21.2 — 7-36-21.2

Limitation on increases in valuation of residential
property.

# A.

Residential property shall be valued at its current and correct value in
accordance with the provisions of the Property Tax Code; provided that for the 2001
and subsequent tax years, the value of a property in any tax year shall not exceed the
higher of one hundred three percent of the value in the tax year prior to the tax year in
which the property is being valued or one hundred six and one-tenth percent of the
value in the tax year two years prior to the tax year in which the property is being
valued. This limitation on increases in value does not apply to:
(1) a residential property in the first tax year that it is valued for property
taxation purposes;
(2) any physical improvements, except for solar energy system installations,
made to the property during the year immediately prior to the tax year or omitted in a
prior tax year; or
(3) valuation of a residential property in any tax year in which:
(a) a change of ownership of the property occurred in the year immediately
prior to the tax year for which the value of the property for property taxation purposes is
being determined; or
(b) the use or zoning of the property has changed in the year prior to the tax
year.

# B.

If a change of ownership of residential property occurred in the year immediately
prior to the tax year for which the value of the property for property taxation purposes is
being determined, the value of the property shall be its current and correct value as
determined pursuant to the general valuation provisions of the Property Tax Code.

# C.

To assure that the values of residential property for property taxation purposes
are at current and correct values in all counties prior to application of the limitation in
Subsection A of this section, the department shall determine for the 2000 tax year the
sales ratio pursuant to Section 7-36-18 NMSA 1978 or, if a sales ratio cannot be
determined pursuant to that section, conduct a sales-ratio analysis using both
independent appraisals by the department and sales. If the sales ratio for a county for
the 2000 tax year is less than eighty-five, as measured by the median ratio of value for
property taxation purposes to sales price or independent appraisal by the department,
the county shall not be subject to the limitations of Subsection A of this section and shall
conduct a reassessment of residential property in the county so that by the 2003 tax
year, the sales ratio is at least eighty-five. After such reassessment, the limitation on
increases in valuation in this section shall apply in those counties in the earlier of the
2004 tax year or the first tax year following the tax year that the county has a sales ratio
of eighty-five or higher, as measured by the median ratio of value for property taxation
purposes to sales value or independent appraisal by the department. Thereafter, the
limitation on increases in valuation of residential property for property taxation purposes
in this section shall apply to subsequent tax years in all counties.

# D.

The provisions of this section do not apply to residential property for any tax year
in which the property is subject to the valuation limitation in Section 7-36-21.3 NMSA
1978.

# E.

As used in this section, "change of ownership" means a transfer to a transferee
by a transferor of all or any part of the transferor's legal or equitable ownership interest
in residential property except for a transfer:
(1) to a trustee for the beneficial use of the spouse of the transferor or the
surviving spouse of a deceased transferor;
(2) to the spouse of the transferor that takes effect upon the death of the
transferor;
(3) that creates, transfers or terminates, solely between spouses, any co-
owner's interest;
(4) to a child of the transferor, who occupies the property as that person's
principal residence at the time of transfer; provided that the first subsequent tax year in
which that person does not qualify for the head of household exemption on that
property, a change of ownership shall be deemed to have occurred;
(5) that confirms or corrects a previous transfer made by a document that was
recorded in the real estate records of the county in which the real property is located;
(6) for the purpose of quieting the title to real property or resolving a disputed
location of a real property boundary;
(7) to a revocable trust by the transferor with the transferor, the transferor's
spouse or a child of the transferor as beneficiary; or
(8) from a revocable trust described in Paragraph (7) of this subsection back
to the settlor or trustor or to the beneficiaries of the trust.

# F.

As used in this section, "solar energy system installation" means an installation
that is used to provide space heat, hot water or electricity to the property in which it is
installed and is:
(1) an installation that uses solar panels that are not also windows;
(2) a dark-colored water tank exposed to sunlight; or
(3) a non-vented trombe wall.