Payment in Lieu of Taxes Program

MDHA’s Payment In Lieu of Taxes (PILOT) program is a financial incentive designed to encourage new construction and substantial rehabilitation of affordable multi-family housing in Metropolitan Nashville-Davidson County. Projects that have applied for federally sponsored Low-Income Housing Tax Credit (LIHTC) program through Tennessee Housing Development Agency (THDA) are eligible to apply.  The PILOT program provides significant property tax relief for a period of up to 10 years and encourages developers to expand the supply of affordable housing within Nashville-Davidson County.

MDHA has the annual authority to negotiate up to $2,500,000 per program year in additional (over and above the pre-development assessed value of the property) PILOT tax abatement. MDHA does not have final approval authority for PILOT tax abatement on individual properties as each deal has to be approved by Metro Council. Once MDHA staff determines there is a financial need for the PILOT, staff will request the MDHA Board of Commissioners to approve submitting a request for PILOT tax abatement for the property to Metro Council to obtain final approval.