Payment in Lieu of Taxes (PILOT) Overview
The City of Grand Rapids administers a payment in lieu of taxes (PILOT) program that exempts eligible housing units from standard property taxes (i.e. ad valorem taxes) and allows the owner to pay a reduced PILOT fee instead. This is authorized by Chapter 9, Article 5 of Title I of the City Code (i.e. the PILOT Ordinance).
Click here(PDF, 168KB) to read the ordinance
Types of PILOTs
The PILOT program includes two general types:
Low-Income PILOT
The Low-Income PILOT is for rental housing with federal or state (MSHDA) "qualifying financing" that restricts the rental units for affordable housing. Two common forms of "qualifying financing" are: A) Low-Income Housing Tax Credits (LIHTC) along with a mortgage loan, and B) a HOME Investment Partnerships Program (HOME) loan. Eligible units must be rented to low-income tenants, which typically means tenants with household income at or under 60% of area median income (AMI). LIHTC units may be rented to tenants with household incomes up to 80% of AMI as long as all of the LIHTC units have an overall average of 60% of AMI. Low-Income PILOTs are limited to fifty (50) years in length or the term of the “qualifying financing,” whichever is less.
Click here for more information about Low-Income PILOT
*Please note there is a $270 PILOT application fee