The proposed General Assembly Raised Bill No. 7114 aims to establish a tax credit program for the construction of residential units above existing retail properties in Connecticut. Effective July 1, 2025, and applicable to taxable years starting January 1, 2026, the bill defines key terms such as "dwelling unit," "nonprofit corporation," "owner," "qualified construction expenditures," and "retail property." It mandates the Commissioner of Housing to create a system for administering tax credit vouchers for eligible owners who construct residential units above retail spaces. Owners can receive a tax credit voucher amounting to 10% of their qualified construction expenditures for each additional floor built, up to a maximum of three floors, with a total cap on tax credits reserved not exceeding three million dollars in any fiscal year.

The bill outlines the process for obtaining tax credit vouchers, including the submission of construction plans and estimates to the Commissioner of Housing for approval. It specifies that owners must incur qualified construction expenditures exceeding $15,000 to be eligible for the tax credit. Additionally, the tax credit is capped at $30,000 per dwelling unit for non-profit owners and $50,000 for nonprofit corporations. The bill also allows for the carryforward of any unused tax credits for up to four years. Overall, the legislation seeks to incentivize the development of residential housing in urban areas by leveraging existing retail properties.