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State of California Franchise Tax Board

Substandard Housing Program

The Substandard Housing Program assists state and local agencies responsible for abating unsafe living conditions that violate California Health and Safety Codes.

Substandard housing is property in violation of California state or local health and safety codes as determined by city or county regulatory agencies. Only these regulatory agencies have authorization to issue determinations that property is noncompliant (substandard) or compliant.

We disallow income tax deductions claimed for interest, taxes, amortization, and depreciation pursuant to California Revenue and Taxation Code (R&TC) Sections 17274 and 24436.5 relating to substandard property. If the disallowed deductions result in additional tax due, we issue an FTB 5830, Notice of Proposed Assessment (NPA).

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