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IRS, Treasury Amend LIHTC Utility Allowances Submetering Regulations

Wednesday, March 2, 2016 - 2:00PM

The Internal Revenue Service and the Treasury Department will publish in tomorrow’s Federal Register final and temporary regulations that amend the utility allowance regulations concerning the low-income housing tax credit (LIHTC). The final regulations provide that utility costs paid by a LIHTC property tenant based on actual consumption in a submetered rent-restricted unit are treated as paid by the tenant directly to the utility. Thus, the utility costs do not count against the maximum rent that the LIHTC building owner can charge. The temporary regulations extend the principles of these submetering rules to LIHTC property owners that provide low-income tenants with energy directly acquired from a renewable source and that is not delivered by a local utility provider. The regulations will be effective on the date of publication in the Federal Register.

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