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Senator Introduces Legislation with Tax Credits to Spur Private-Public Partnerships

Tuesday, June 19, 2001 - 1:45AM

Sen. Robert Torricelli (D-N.J.) has introduced legislation intended to spur public-private partnerships by providing tax credits for the development of low-to-moderate single-family homes, including condominiums and cooperatives. S. 1081, the Affordable Housing and Environmental Action Through Development Act (AHEAD), contains several tax incentives for developers, including:

  • A deduction from gross income of the first $10,000 of gain from the sale of each home that qualifies for a tax credit.

  • An extension of the existing 10 percent rehabilitation tax credit to properties placed in service, from 30 years to at least 50 years, as an inducement for the rehabilitation of older buildings.

  • A reduction in reportable gain under the existing low-income housing tax credit by allowing certain industry practice development costs to be included in the eligible basis of the property. Included are costs for site preparation, state and local impact fees, reasonable development costs, professional fees related to basis items, construction financing costs (but not land acquisition costs), and on-site and adjacent improvements required by state or local government.

The proposed legislation requires 40 percent of the homes in the development plan be reserved for homebuyers whose income is lower than the median income of the area. Additionally, homebuyers are restricted for five years from selling their properties to anyone whose income is above the area’s median income. To access S.1081, click here.

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