Loading the player...

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.

BREAKING DOWN '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.

RELATED TERMS
  1. Affordable Market Value (AMV)

    The sale price of a multi-family residential housing unit sold ...
  2. Foreclosure Prevention Act of 2 ...

    A housing act that is designed to help families keep homes that ...
  3. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  4. Elderly and Disabled Credit

    A non-refundable tax credit available for taxpayers who are aged ...
  5. Credit for Qualified Retirement ...

    Also known as IRS Form 8880, the Credit for Qualified Retirement ...
  6. Additional Child Tax Credit

    A refundable credit that can be claimed by taxpayers who are ...
Related Articles
  1. Investing

    Lower Corporate Taxes May Hurt Affordable Housing

    Lower corporate tax rates will affect builders' use of tax credits for low-cost housing.
  2. Personal Finance

    5 Tax Credits You Shouldn't Miss

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

    How Cheap is Affordable Housing Right Now?

    Learn how many affordable housing government programs work in the United States, including income requirements and the scarcity of affordable apartments.
  4. Taxes

    What's a Regressive Tax?

    A regressive tax is a levy in a tax system where the tax rate does not change based on the level of income.
  5. Personal Finance

    Who Benefits from Microfinance?

    Microfinance describes banking services provided to low-income people or groups. Specific services offered by microfinance institutions include microloans, micro-savings and micro-insurance products.
  6. Investing

    5 Ways an Open House Can Actually Hurt Your Home Sale

    They may be more trouble than they're worth.
  7. Personal Finance

    Are You Taking Advantage of the College Tuition Tax Credit?

    Parents with a child enrolled in college should check out the college tuition tax credit, a boon that can help defray the cost of a university education.
  8. Personal Finance

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  9. Personal Finance

    Low-Income Households to Get Broadband Subsidy

    The FCC's recently approved broadband subsidy for low-income households should help many people get online. Not that everyone's in favor of it.
  10. Taxes

    This Explains $0 Federal Income Tax for Millions

    Understand how the earned income tax credit works and whether it applies to you.
RELATED FAQS
  1. What is the difference between a regressive tax versus a progressive tax?

    Determine how progressive and regressive taxes impact your personal finances, and learn more about how you pay both types ... Read Answer >>
  2. Is it possible to have a credit limit that's too high?

    Avoid these pitfalls when working with high credit limits, and learn how to increase your credit score by increasing your ... Read Answer >>
Hot Definitions
  1. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
  2. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
  3. Competitive Advantage

    An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers ...
  4. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities ...
  5. Wash-Sale Rule

    An Internal Revenue Service (IRS) rule that prohibits a taxpayer from claiming a loss on the sale or trade of a security ...
  6. Porter Diamond

    A model that attempts to explain the competitive advantage some nations or groups have due to certain factors available to ...
Trading Center