2.622 Certified Housing Development Credit

Origin: A tax credit is allowed for up to 25% of qualified expenditures in certified housing development projects. The credit is administered by the Executive Office of Housing and Livable Communities (EOHLC). The EOHLC determines the amount of the credit to which a taxpayer is entitled. Qualified expenditures are those costs directly related to the construction or substantial rehabilitation of residential property located in designated areas of gateway municipalities. Qualified expenditures do not include the initial purchase price of the property. To be considered a certified housing development a project must meet a number of requirements. Specifically, the project must contain two or more housing units. In addition, 80% of the units contained in the project must be priced consistently with prevailing rents or sale prices in the city or town where the property is located. Finally, the city or town must have adopted full or partial property tax exemptions for projects that are otherwise eligible for the credit. A taxpayer can claim a credit equal to the amount awarded by the EOHLC. The total amount of credits awarded in the Commonwealth cannot exceed $57 million for calendar year 2023 and $30 million for subsequent years. The credit is available for the tax year in which the EOHLC gives the Department of Revenue (DOR) written notification of completion of the certified housing development project. The credit may be claimed against the full amount of the recipient's tax liability, except that corporations may not use the credit to offset the $456 minimum excise. Unused credits may be carried forward for ten years. Taxpayers are allowed to sell their credits to third parties. The amount of revenue foregone as a result of the credit constitutes a tax expenditure.

Origin: St. 2010, c. 240; M.G.L. c. 40V; c. 63, §38BB