Senate Tax Reform Bill: Better for Affordable Housing
The Senate tax reform legislation represents a much better deal for multifamily developers and members of the affordable housing community.
Late Thursday night, the Senate Finance Committee released its tax reform proposal, which includes a number of notable differences from the House bill.
Like the House bill, the Senate proposal makes no changes to Section 42, fully retaining the Low-Income Housing Tax Credit in its current form. But while the House proposes to eliminate private activity bonds (PABs), effectively abolishing 4 percent credits, the Senate bill would fully retain PABs. This is a major win for affordable housing.
The Senate bill would also make no changes to carried interest; continues to allow like-kind exchanges for real property; and would shorten the multifamily and commercial building depreciation period to 25 years. We continue to analyze the Senate proposal, but recognize that in many areas it is moving in a better direction.
Meanwhile, on Thursday afternoon, the House Ways and Means Committee concluded its markup of H.R. 1, the Tax Cut and Jobs Acts. The bill was favorably reported out of committee on a party line vote of 24 to 16.
All Democratic amendments were rejected, and the committee did make some changes to the business rate structure for pass-throughs and carried interest, which is retained as long as the asset it held for three years. We also continue to analyze that bill.
Next week, the Senate Finance Committee will begin consideration of its tax reform package. On the other side of the Capitol, the full House of Representatives is expected to pass H.R. 1 next week.
Congress remains on track to complete tax reform this year.
This article is a post from NAHB’s NAHB Now blog.