The bill amends Chapter 44-11 of the General Laws by introducing the "Affordable Housing Tax Credit Act," which establishes a state low-income housing tax credit for business firms investing in low-income rental housing production in Rhode Island. This initiative addresses the critical shortage of affordable housing for low-income families, the elderly, and disabled individuals by incentivizing businesses to contribute to housing solutions. Qualifying business firms that are eligible for the federal low-income housing tax credit can apply for a state credit equal to 50% of the federal credit they receive in the current tax year.

Additionally, the bill eliminates sales tax on materials used in the renovation of affordable rental housing properties and establishes an exemption from income tax for income derived from the sale of renovated residential properties that are deed-restricted. Specifically, any income derived from the sale of residential property that has been issued an occupancy permit on or after January 1, 1995, after renovations as defined by the U.S. Department of Housing and Urban Development, and that is encumbered by a covenant recorded in the land records in favor of a governmental unit or the Rhode Island Housing and Mortgage Finance Corporation, shall not be subject to taxation.

The bill also outlines a ten-year freeze on the tax valuation of newly renovated affordable rental housing properties, maintaining their assessed value prior to renovation for ten years following the completion of the renovation. Overall, the legislation aims to enhance affordable housing initiatives in Rhode Island.

Statutes affected:
5402: 44-18-30