REPORT EVALUATES EFFECT OF TAX REFORM ON AFFORDABLE RENTAL HOUSING
If current corporate tax reform proposals are successful, the amount of equity that can be raised from the low-income housing tax credit (LIHTC) would decrease significantly, according to a report released today by Novogradac & Company LLP. “Affordable Rental Housing After Tax Reform: Calculating Corporate Tax Reform's Possible Effects on Equity Raised from Low-Income Housing Tax Credits” found that lower top corporate tax rates would lower LIHTC yields and create downward pressure on LIHTC investor equity pricing. Adding in extended depreciation periods could further compound the effect, resulting in an annual loss of as much as $1 billion or more in LIHTC equity.
The findings of this report and the prospects for tax reform will be discussed at the Novogradac Affordable Housing Tax Credit Conference in New Orleans, May 16-17.