FY 2018 Federal Funding Law Expands Low-Income Housing Tax Credit

Included in the recently passed federal government funding law is a provision that expands the low-income housing tax credit.  Housing advocates expressed concern that the reduction of the corporate tax rate from 35 percent to 21 percent – as a result of the recently passed tax reform law – reduced the value of the low-income housing tax credit for existing deals and “will require project developers to incur more permanent and/or defer larger amounts of developer fees,” according to Thomas Morton of Pillsbury law.
To alleviate these concerns, the federal funding law increases the tax credit allocation by 12.5 percent over the next four years, and adds a new income averaging test available for election after March 23, 2018.  Additional information is available in this summary of the provision from Ernst & Young.
For more information, contact Matt Turkstra at (202) 547-4733, or matt.turkstra@agc.org.


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