News and Notes

Bi-Partisan Rural Historic Tax Credit Improvement Act introduced in Congress

4/17/2025

Sen. Shelley Moore Capito (R-WV) and Sen. Mark Warner (D-VA) recently introduced the Rural Historic Tax Credit Improvement Act (S. 631, H.R. 1454) in the Senate. This bill would makes several changes to the Historic Tax Credit (HTC) aimed at streamlining processes, reducing cost burdens to rural property owners and developers, and provide affordable housing incentives. Rep. Mike Carey (R-OH) and Rep. Steven Horsford (D-NV) introduced companion legislation in the House.

This bill would increase the HTC from 20% to 30% for projects in rural areas, further bump up the credit to 40% for affordable housing creation, allow the credit to be taken in the first year for small and rural projects, and would eliminate the basis adjustment. All of these changes would help improve the HTC and make it more beneficial for smaller and rural projects, where projects are often less financially viable.

New HTC-GO Bill Introduced in Senate and House

4/14/2025

A new version of the Historic Tax Credit Growth and Opportunity Act (HTC-GO) was reintroduced by Rep. Darin LaHood (R-IL) and Rep. Tom Suozzi (D-NY) in the U.S. House and Sen. Bill Cassidy (R-LA) and Sen. Mark Warner (D-VA) in the U.S. Senate. The bill would return to a one-year delivery of the historic tax credit (HTC). Other new provisions would specifically encourage smaller and rural projects with a boost in credit, and a new allowance for transferring credits.

Returns to a 1-year delivery of Historic Tax Credits for all projects
- Since 2017, the 20% tax credit has been delivered over 5-years (4% per year), this provision will return delivery of the HTC to 1-year.
Lowers the Substantial Rehab Test from 100% to 50% of a building’s basis
- Lowers the substantial rehabilitation threshold, making more projects eligible to use the HTC.
Eliminates the HTC Basis Adjustment Requirement
- Eliminates the requirement that the amount of the HTC must be deducted from a building’s basis (the property’s cost for tax purposes), increasing the value of the HTC and making it much easier to pair with the federal Low-Income Housing Tax Credit.
Modifies Tax Exempt Use Rules
- Makes the HTC easier to use by nonprofits such as community health centers, local arts centers, affordable housing, homeless services, museums, theaters, and others by eliminating Tax Code restrictions that make it challenging for nonprofits to partner with developers.
Increases the credit for smaller projects:
- Projects below $3.75 million will receive a 30% credit.
- Rural projects below $5 million will receive a 30% credit. (Rural Definition: Cities/towns with populations less than 50,000 and not contiguous and adjacent to cities/towns of 50,000 in population).
All small projects are eligible for direct transfer, without need of a partnership-style investment.

Bi-Partisan Rural Historic Tax Credit Improvement Act introduced in Congress

New HTC-GO Bill Introduced in Senate and House

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