Low-Income Housing Tax Credit Elimination Act
The Low-Income Housing Tax Credit Elimination Act would end the federal Low-Income Housing Tax Credit (LIHTC) program for new projects. Specifically, it amends Section 42 of the Internal Revenue Code to add a sunset provision stating that no LIHTC can be determined for any building placed in service in a taxable year beginning after the date of enactment. In practical terms, this means no new LIHTC allocations would be available for affordable housing projects that are placed in service after the enactment date. The bill’s short title is the Low-Income Housing Tax Credit Elimination Act, and it was introduced in the House by Rep. Grothman (joined by Rep. Gosar) and referred to the Ways and Means Committee. The text provided does not include any transitional provisions or guidance on pre-enactment projects.
Key Points
- 1What LIHTC is: A federal program that provides a tax credit to private developers to encourage the construction and rehabilitation of affordable rental housing, typically claimed over a 10-year period for each qualified project.
- 2Sunset provision: The bill adds a new subsection (o) to Section 42, stating that no credit shall be determined under section 42(a) for buildings placed in service in a taxable year beginning after the enactment date.
- 3Effective date: The sunset takes effect for buildings placed in service after the date of enactment; it does not specify retroactive changes for projects already in place or under construction prior to enactment (not explicitly addressed in the text provided).
- 4Legislative status: Introduced in the House on May 21, 2025, by Rep. Grothman (for himself and Rep. Gosar) and referred to the Committee on Ways and Means.
- 5Scope of change: The bill would eliminate new LIHTCs going forward; existing LIHTCs already allocated or projects already in progress could be governed by current law, though the text does not spell out transitional rules.