The Rural Historic Tax Credit Improvement Act would enhance federal tax credits for people and businesses that rehabilitate historic buildings in rural areas. For affordable housing projects in rural communities, the bill would increase the rehabilitation tax credit to 40 percent of qualified expenses, while non-housing projects would receive a 30 percent credit, with a $5 million expenditure limit per project. The bill defines rural areas as places outside cities with populations over 50,000 and their adjacent urbanized areas, and affordable housing as units serving households earning no more than 60 percent of the local median income. The legislation also allows taxpayers to transfer unused credits to other taxpayers and includes safeguards requiring developers to maintain affordable housing standards or face tax recapture penalties. These changes would take effect for buildings placed in service after December 31, 2024.
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