The property of an authority is declared to be public property used for essential public and governmental purposes and such property of an authority shall be exempt from all taxes and special assessments levied by the city, the county, the state or any political subdivision thereof. However, in lieu of such taxes an authority may make annual payments in lieu of taxes and special assessments to the city or county or any such political subdivision for improvements, services and facilities furnished by such city, county or political subdivision for the benefit of a housing project. Each such annual payment in lieu of taxes shall be made after the end of the fiscal year established for a housing project, and may be in an amount not exceeding ten percent (10%) of the aggregate shelter rent charged by the local authority in respect to such project during such fiscal year. However, upon failure of the local authority to make any such payment in lieu of taxes, no lien against any project or assets of the local authority shall attach.
No payment for any year shall be in excess of the amount of the real property taxes which would have been paid for such year if the project were not exempt from taxation.