Tax Reform Proposal Retains LIHTC, Still Devastates Affordable Housing
The House Ways and Means Committee this week released its long-await tax reform legislation, the Tax Cuts and Jobs Act (HR 1). While the bill retains the Low-Income Housing Tax Credit (LIHTC), one of only two business credits preserved, it eliminates several other taxes and bonds that are critical to community development and affordable housing. If passed as-is, the Tax Cuts and Jobs Act would be devastating for communities.
The committee is scheduled to begin mark-up of the bill on Monday, November 6 at 12:00 pm ET, a process that is likely to last several days. This means there is very little time to ask lawmakers to propose changes- contact your Representatives now to tell them to preserve the parts of tax code that are so critical to communities.
What’s in the Bill
- Low Income Housing Tax Credit: Maintains the credit
- Corporate Tax Rate: Cut from 35 percent to 20 percent
- New Market Tax Credit: Eliminates
- Private Activity Bonds: Eliminates
- Historic Preservation Tax Credit: Eliminates
- Mortgage Interest Deduction: Caps at $500,000 for new mortgages, savings not re-invested in affordable housing
The Low-Income Housing Tax Credit is preserved, but the 4 percent remains unauthorized. Also missing from the Tax Cuts and Jobs Act is language proposed by Rep. Pat Tiberi (R-Ohio) and Rep. Richard Neal (D-Ma.) in their Affordable Housing Credit Improvement Act (HR 1660). Though NAHRO thanks the Ways and Means Committee for retaining the 9 percent credit, NAHRO opposes other changes to bonds and the corporate tax rate will undermine the effectiveness of the program and essentially eliminate the 4 percent credit.