The bill retains the mortgage-interest deduction and private-activity bonds that fund low-income housing Senate Republicans unveiled their proposal for tax reform on Thursday, and while it maintains many of the primary provisions in the House of Representatives bill released last week, it diverges on measures related to property and housing.
Most notably, the Senate bill eliminates state and local tax deductions that are popular in coastal cities with high property taxes and in states with high income taxes. Members of the House who represent districts in states like New Jersey and New York with high property taxes are already rallying to leave the deductions untouched. The House bill maintained property tax deductions but capped them at $10,000. Affordable housing advocates assailed the House bill for eliminating tax-exempt private-activity bonds that fund a lot of public-private infrastructure projects, including more than half of the affordable housing units produced under the Low Income Housing Tax Credit Program (LIHTC).
In a win for affordable housing advocates, the Senate bill retains these private-activity bonds, although it maintains the House bill?s exclusion for using the bonds to build professional sports stadiums.
The Senate bill also retains the Historic Tax Credit (HTC) program that provides incentives for rehabilitating old and abandoned buildings, which the House bill eliminated. However, the Senate bill does reduce the credit from 20 to 10 percent o...