News Historic Tax Credit

HTC Alert: New Version of HTC-GO Introduced in the House

Written By: NTCIC

New Version of HTC-GO Introduced in the House, Ask Your Representative to Cosponsor!

On April 1, Representatives Earl Blumenauer (D-OR) and Darin LaHood (R-IL) introduced a new version of the Historic Tax Credit Growth and Opportunity Act (HTC-GO) in the House of Representatives. It includes temporary tax provisions that will bring relief to projects impacted by the pandemic and permanent provisions that will add value to the Historic Tax Credit (HTC), improve access to the credit, and increase investment in smaller rehabilitation projects. The introduction of companion legislation in the Senate is expected soon.

How to contact your House Representative and encourage them to Cosponsor the HTC-GO

Ask/Explain to your Member of Congress:

  • “Historic Tax Credit projects will help revitalize our communities and support our nation’s economic recovery. Many projects continue to experience profound challenges on-site and in the financing realm, due to the pandemic.”
  • “Now is the time to strengthen this proven incentive to address the slowdown in rehabilitation projects across the country, particularly smaller projects in our main street communities and downtowns.”
  • “Would the Representative please cosponsor the Historic Tax Credit Growth and Opportunity Act, sponsored by Rep. Blumenauer and Rep. LaHood?”
  • “These provisions were included and passed in the House Infrastructure bill (HR 2) in July 2020. Please look for opportunities to include these provisions in future infrastructure legislation.”
  • Please share the HTC-GO Fact Sheet

What’s in the New Version of the HTC-GO Legislation?

Temporary Provisions

Developers and building owners are experiencing challenges in rehabbing historic buildings. The financial markets have slowed to a crawl, making it difficult for projects to access capital and stalling complex historic real estate developments. The increased volatility in the market and project risk is forcing banking institutions to decrease their loan frequency and the overall amount while tightening underwriting requirements. Increases in material and construction costs and an uncertain tenant market have further impacted potential developments. As a result, many projects have stalled or are no longer feasible.

The HTC-GO legislation temporarily increases the rehabilitation credit (IRC § 47) to address projects impacted by the pandemic.

  • This provision increases the HTC percentage from 20% to 30% for 2020 through 2024
  • The credit percentage is phased down to 26% in 2025, 23% in 2026, and returns to 20% in 2027 and thereafter

Permanent Provisions

The following provisions would make important changes to the HTC to encourage more building reuse and redevelopment nationwide and would be particularly impactful for small, midsize, and rural communities. These provisions would not only make the credit easier to use and more historic properties eligible, but it would also enhance the value of the HTC and make the credit easier to use to create affordable housing.

  • Increases the credit from 20% to 30% for projects with less than $2.5 million in qualified rehabilitation expenses, making it easier to complete small rehabilitation projects
  • Lowers the substantial rehabilitation threshold, making more buildings eligible to use the HTC
  • Eliminates the requirement that the value of the HTC must be deducted from a building’s basis (property’s value for tax purposes), increasing the value of the HTC and making it easier to pair with the federal Low-Income Housing Tax Credit
  • Makes the HTC easier to use by nonprofits for community health centers, local arts centers, affordable housing, homeless services, and others by eliminating IRS restrictions that make it challenging to partner with developers