Sponsors (2)
Eliminates the Low-Income Housing Tax Credit for buildings placed in service in taxable years beginning after enactment.
Eliminating the LIHTC for new buildings reduces federal tax expenditures and simplifies tax administration, but risks substantially cutting affordable housing production—with direct harms to low-income renters, local housing markets, and the construction sector and potential offsetting costs for housing assistance.
Taxpayers: Federal budgetary outlays (and future federal tax expenditures) would be reduced because the Low-Income Housing Tax Credit (LIHTC) is eliminated for new buildings placed in service after enactment.
Federal government / tax administrators: Removes a complex credit program for new buildings placed in service after enactment, simplifying tax code administration and compliance for those transactions.
Low-income renters and households: Fewer new LIHTC-funded affordable units will likely be produced, reducing supply and putting upward pressure on rents and availability for low-income renters.
State and local housing developers, builders, and local economies: Removing the credit eliminates a major financing tool that leverages private investment, likely reducing affordable housing projects and causing job losses in construction and development.
Middle- and low-income families and communities: Declines in affordable housing production could erode indirect benefits of expanded affordable housing—reduced housing cost burdens, greater housing stability, and stabilized neighborhoods.
Based on analysis of 2 sections of legislative text.
Official title: To amend the Internal Revenue Code of 1986 to sunset the low-income housing tax credit, and for other purposes.
Introduced May 21, 2025 by Glenn Grothman · Last progress May 21, 2025
Eliminates the federal Low-Income Housing Tax Credit (LIHTC) for any building placed in service in taxable years beginning after the law is enacted, removing the tax credit that currently subsidizes private construction and rehabilitation of affordable rental housing. The change takes effect for taxable years beginning after enactment and applies to all buildings placed in service in those years, shifting tax treatment and future financing incentives for affordable housing development.