Low-Income Housing Tax Credit

AAA

DEFINITION of 'Low-Income Housing Tax Credit'

This act provides an incentive for home developers to build, buy and refurbish housing for low-income taxpayers. The Low-Income Housing Tax Credit also provides a non-refundable credit for those who invest in low-income housing projects as a means of stimulating the flow of capital into this sector. The type of housing structures typically used for this credit are multi-family dwellings.

INVESTOPEDIA EXPLAINS 'Low-Income Housing Tax Credit'

The Low-Income Housing Tax Credit was created as part of the Tax Reform Act of 1986. Residents of these housing projects cannot have incomes that exceed certain guidelines in order for the project to qualify for the credit. This part of the act has been extremely successful, and has created over a hundred thousand low-income housing units and several hundred million dollars in investment capital.

VIDEO

Loading the player...
RELATED TERMS
  1. Refundable Credit

    A tax credit that is not limited by the amount of an individual's ...
  2. Deduction

    Any item or expenditure subtracted from gross income to reduce ...
  3. Credit

    1. A contractual agreement in which a borrower receives something ...
  4. Tax Reform Act Of 1986

    A law passed by the United States Congress to simplify the income ...
  5. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  6. Exemption

    A deduction allowed by law to reduce the amount of income that ...
Related Articles
  1. Entrepreneurship

    Tax Credit For Plan Expenses Incurred By Small Businesses

    Determine whether your business is eligible to claim a tax credit for establishing a retirement plan.
  2. Savings

    Saver's Tax Credit: A Retirement Savings Incentive

    Here's another reason to put money toward your retirement nest egg.
  3. Taxes

    IRA Contributions: Deductions and Tax Credits

    We outline the incentives and help you take full advantage of the benefits.
  4. Taxes

    Get A Tax Credit For Your Foreign Investments

    The foreign tax credit provides a break on investment income made and taxed in a foreign country.
  5. Taxes

    How To Claim A Dependent On Your Tax Return

    If you are a caregiver, get to know the rules for claiming a dependent before filing your taxes.
  6. Taxes

    5 Tax Credits You Shouldn't Miss

    If you're not taking advantage of these deductions, you could be missing out on tax savings.
  7. Taxes

    Give Your Taxes Some Credit

    A few tax credits can greatly increase the amount of money you get back on your return.
  8. Taxes

    What To Do If You Lost Your W-2

    There's no need to panic if you don't have your Form W-2 to file taxes, there are easy ways to gain access to the missing form or file without it.
  9. Taxes

    Will Itemized Deductions Get You A Bigger Refund?

    April and taxes are due soon. If you need to file your return, you might have to decide if itemizing your deductions this year will net you a better deal.
  10. Taxes

    The First Thing You Should Do With Your Tax Refund

    Nobody likes to pay taxes, but everyone loves to get a tax refund. When the check arrives in the mail, it's hard to resist spending it on some indulgence.

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center