Substandard Housing Program - State and Local Agencies
Benefits of the Substandard Housing Program
Your agency benefits from the Substandard Housing program in two ways:
- Helps promote compliance of substandard property owners by disallowing certain expenses on their tax returns.
- The additional tax we collect assists in rehabilitation.
Distribution of funds
The California General Fund transfers tax revenues we generate from the disallowed income tax deductions to the Local Code Enforcement Rehabilitation Fund. We allocate and disburse funds to the cities and counties that generated the notification of substandard housing to us.
Identification and assessment of noncompliant properties
We review tax returns of taxpayers the regulatory agency identifies as owning substandard property. We disallow income tax deductions for interest, taxes, amortization, and depreciation for substandard property. However, the taxpayer receives an FTB 5830, Notice of Proposed Assessment (NPA), if additional tax due results from adjustments to the tax return.
Notice of Property Noncompliance
Include the owner’s social security number (SSN) on FTB 1010 SRH, Notice of Property Noncompliance. We use the SSN to locate the correct property owner's tax returns. If the SSN is unavailable, provide the owner’s California Driver License (CDL) number. We cannot take any action pursuant to R&TC Sections 17274 and 24436.5 without identification of the property owner.
Notice of Property Compliance or Notice of Property Noncompliance Filed in Error
Send FTB 1011 SRH, Notice of Property Compliance or FTB 1012 SRH, Notice of Property Noncompliance Filed in Error to us and to the property owners. We use either of these notices to determine the period of time we can assess a property owner. The notices inform property owners as follows:
- The Notice of Property Compliance informs property owners they have corrected the substandard condition of the property.
- The Notice of Property Noncompliance Filed in Error informs the property owners the Notice of Property Noncompliance is revoked and the property was never substandard.
If you do not send a Notice of Property Compliance or Notice of Property Noncompliance Filed in Error to us, we continue to use our resources to disallow the income tax deductions of property owners who are actually in compliance with state and local health and safety codes.
These forms are fillable.
- FTB 1010 SRH, Notice of Property Noncompliance
- FTB 1011 SRH, Notice of Property Compliance
- FTB 1012 SRH, Notice of Property Noncompliance Filed in Error
If you want to participate in the Substandard Housing Program, call us at 916.845.5296. Persons with hearing or speech impairments, call TTY/TDD 800.822.6268.
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