The new year began with a major victory for the low-income housing tax credit (LIHTC). Congress’ fiscal cliff package, agreed upon late Jan. 1, included an extension of the 9 percent floor for the LIHTC. The 9 percent floor, originally set in 2008 by the Housing and Economic Recovery Act, had effectively expired. But now, any projects receiving allocations by the end of 2013 may use the minimum 9 percent credit rate instead of the monthly floating rate, which is closer to 7.36 percent. This extension will ensure more equity can go into any one given project and increase the financial viability of LIHTC deals.
The fiscal cliff legislation also prevents income taxes from increasing on those earning less than $450,000, ends tax breaks for top earners, delays sequestration (the approximately $109 billion in automatic across-the-board spending cuts) until March 1, continues expanded unemployment benefits for one year, and includes a number of other tax extenders.
Read more...Fiscal Package Brings Victory for LIHTC - Legislation, Lihtc - Housing Finance
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