Affordable Housing Incentives Act

Summary#

This bill adds a new part to section 1033 of the Internal Revenue Code. It treats a sale or transfer of real property to a "qualified housing operator" for use as affordable housing as an "involuntary conversion" that can allow nonrecognition of gain. The bill lists who counts as a qualified housing operator (for example, state, tribal, or local governments; tribally designated housing entities; community housing development organizations; and certain nonprofit housing organizations).

To qualify, the property must have a binding legal restriction that requires each owner to keep the property as affordable housing for 30 years. The seller must notify the Secretary of the Treasury within 90 days after the sale. The seller must attach a qualified appraisal to the tax return and the sale price must not exceed that appraisal. The Secretary must check compliance at least every 5 years during the 30-year period and may audit. The bill also includes a rule about like-kind replacement property for real property held for business or investment and allows the Secretary to write regulations. The amendment applies to sales and transfers after the bill becomes law.

What it means for you#

• If you own real property and sell it to a qualified housing operator for use as affordable housing, the sale can be treated under section 1033 so you may have nonrecognition of gain when the sale meets the bill's conditions.
• If you are a housing operator, you must meet the bill's definition of a qualified housing operator and maintain the property under the 30-year affordability covenant.
• If you are a tenant or member of the public, the bill text does not state direct benefits or changes to tenant rights.

Expenses#

No publicly available information on budgetary effects or costs in the bill text.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.