An amendment that would allow for a minimum 9 percent low-income housing tax credit rate through 2013 has been added to The Family and Business Tax Cut Certainty Act of 2012, a package of tax extenders.
Approved by the Senate Finance Committee, the amendment was sponsored by Sens. Maria Cantwell (D-Wash.) and Olympia Snowe (R-Maine).
The amendment “would extend the expiration date by changing the deadline to a commence construction date or to projects that have received an allocation before Dec. 31, 2013,” according to the Senate Finance Committee.
A fixed 9 percent rate was created as a temporary measure under the Housing and Economic Recovery Act of 2008. However, new developments using this minimum rate must be placed in service by Dec. 30, 2013. There is a little more flexibility on the placed-in-service deadline for rehab deals.
Given the long planning horizon required for housing development, the provision effectively expires this year unless it is extended.
The extenders package also includes a two-year extension of the New Markets Tax Credit program.