House Passes $1.7 Trillion Build Back Better Act Containing LIHTC, NHTC, NMTC, Renewable Energy Provisions
The U.S. House of Representatives today passed the Build Back Better Act, a $1.7 trillion bill that includes an expansion of the low-income housing tax credit (LIHTC), the introduction of the neighborhood homes tax credit (NHTC), an additional tribal allocation of the new markets tax credit (NMTC) and $325 billion in renewable energy tax incentives. H.R. 5376 passed 220-213 and now goes to the Senate. The legislation includes an extension of the 12.5% increase in 9% LIHTC allocations that began in 2018 through 2024, adding a 10% increase, plus an annual inflation adjustment, to that amount. The bill also would reduce the 50% test for affordable rental housing financed with private activity bonds (PABs) to 25% for calendar years 2022-26, establish a 50% basis boost for extremely low-income housing and provides a 30% basis boost for LIHTC properties in tribal areas.
The legislation would introduce the NHTC at $3 per capita and $4 million small state minimum in 2022, with annual inflation adjustments in 2023-24, increasing to $6 per capita and $8 small state minimum with inflation adjustments in 2025, after which it would expire. The bill also includes an annual $175 million tribal allocation for the NMTC in 2022-26 and inclusion of the renewable energy tax incentive provisions of the Growing Renewable Energy and Efficiency Now (GREEN) Act and the Clean Energy for America Act, as well as additional green energy incentives.
The Senate version of the bill may contain additional community development provisions.
The LIHTC and NHTC provisions of the legislation will be major topics at the Novogradac 2021 Tax Credit Housing Conference, Dec. 2-3 in Las Vegas.