Tax Agreement Includes Key LIHTC Provisions

Two key provisions of the Affordable Housing Credit Improvement Act (AHCIA) have been included in a bipartisan tax agreement.

Following intense Congressional negotiations, the agreement calls for a temporary restoration of a 12.5% allocation increase to the low-income housing tax credit (LIHTC) as well as a temporary reduction of the 50% bond test to 30% for 2024 and 2025.

These changes have been the top priorities for LIHTC advocates for several years.The restoration of 12.5% increase in 9% LIHTC allocations for 2023 through 2025 and the reduction in the private-activity bond financing threshold to 30% in 2024 and 2025 would finance an additional 202,573 affordable rental homes, estimates Novogradac, an accounting and advisory firm.

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