The Tax Cuts & Jobs Act (the Act) was signed into law at the
end of 2017 and certainly has an impact on the affordable housing
While tax reform left LIHTC intact; the decline in
the corporate tax rate from 35% to 21% is expected to have negative
consequences for new rent-restricted supply.
Tax credits are
now less valuable and prices have declined since discussions on
implementing a corporate tax cut began in 2017. Developers may struggle
with new projects to fill the financing gap resulting from lower
proceeds from investment in LIHTC due to this decline.
allows investors to defer paying tax, up to nine years, on gains if
those gains are invested in Qualified Opportunity Funds that in turn
invest in economically distressed communities (known as opportunity
zones) designated by the governor of each state.
Readers should not act upon information presented without individual professional consultation.
Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.