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Before you rent an apartment in an LIHTC community (Low Income Housing Tax Credit) get all the facts. These communities are usually solely purchased by very wealthy people looking to get tax credit relief. They do not put any income into the property's upkeep. They are very poorly staffed. Usually these communities only have one property manager and possibly a part time assistant and one maintenance tech. Your rent pays for luxurious parties, extravagant vacations and designer homes. Their homes are never in poor neighborhoods which is likely where the community is or was built. If you don't know much about your community. Or if you are interested in finding out more about a community before you sign a lease, email me. I can help make this process much easier for you.
The Low Income Housing Tax Credit (LIHTC - often pronounced "lie-tech", Housing Credit) is a dollar-for-dollar tax credit in the United States for affordable housing investments. It was created under the Tax Reform Act of 1986 (TRA86) that gives incentives for the utilization of private equity in the development of affordable housing aimed at low-income Americans. LIHTC accounts for the majority - approximately 90 percent - of all affordable rental housing created in the United States today. The credits are also commonly called Section 42 credits in reference to the applicable section of the Internal Revenue Code. The tax credits are more attractive than tax deductions as they provide a dollar-for-dollar reduction in a taxpayer's federal income tax, whereas a tax deduction only provides a reduction in taxable income. The "passive loss rules" and similar tax changes made by TRA86 greatly reduced the value of tax credits and deductions to individual taxpayers. As a result, almost all investors in LIHTC projects are corporations.
