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LIHTC: Low-Income Housing Tax Credit |
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LIHTC:
Pros & Cons of the Low-Income Housing Tax Credit,
LIHTC and the Bush tax plan. |
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LIHTC, The Federal Low-Income Housing Tax Credit, was created by the Tax Reform Act of 1986 in an effort to promote the production of low-income rental units. The act authorizes federal tax credits for the production or rehabilitation of units for low-income renters. The LIHTC program has been used to allocate $5.2 billion towards the development of over 1.2 million units put into service between 1987 and 2001.
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How do the LIHTC credits work?
Is there a down-side to the LIHTC?
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State Low-Income Housing Tax Credit programs are also in place in 14 separate states. The state LIHTC programs vary from state to state, but typically work in the same manner as the federal credit, and can usually be used in conjuction with federal credits.
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Which states have their own state tax credit?
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LIHTC and the Bush Tax Plan.
The LIHTC program provides tax credits for investment in qualified affordable housing projects. At the heart of President Bush's 2003 economic stimulus package was a proposal to eliminate taxes on corporate dividends. As a result, "corporations would essentially have to decide whether to reduce corporate taxes and support affordable housing development by investing in LIHTCs or pass on more tax-free dividends to shareholders," according to Affordable Housing Finance .
A study by Ernst & Young found that the tax plan would seriously undermine the LIHTC program and hinder affordable housing production, as "housing credit investment could fall by $1.1 billion and production by 35% if the dividend exclusion were enacted as proposed... The loss would effect about 100,000 people each year."
More on the Bush Tax Plan & LIHTC
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SEE ALSO:
• Housing Costs Rising Faster than Inflation (zFacts Graph)
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Keywords: Low-Income Housing Tax Credit (LIHTC), Affordable Housing
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http://zfacts.com/p/610.html | 01/18/12 07:25 GMT
Modified: Mon, 17 Apr 2006 20:09:34 GMT
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