Revenues
Repeal the Low-Income Housing Tax Credit
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
| Billions of dollars | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2015-2019 | 2015-2024 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change in Revenues | 0.4 | 0.5 | 1.2 | 2.1 | 3.1 | 4.1 | 5.2 | 6.2 | 7.4 | 8.4 | 7.3 | 38.6 |
Source: Staff of the Joint Committee on Taxation.
Note: This option would take effect in January 2015. Estimates are relative to CBO’s April 2014 baseline projections.
Real estate developers who provide rental housing for low-income households may qualify for the low-income housing tax credit, which is designed to encourage investment in affordable housing. The credit covers a portion of the costs incurred for the construction of new housing units, the substantial rehabilitation of existing units, and the purchase of land on which new housing units will be built.
This option would repeal the low-income housing tax credit starting in calendar year 2015, although projects granted credits before that year could continue to claim them until their eligibility expired.