Rental Housing Investment Act

Key Points

• This bill creates a new bonus depreciation tax break for builders of residential rental properties with at least two units. Owners can deduct up to $150,000 per dwelling unit in the first year the building is placed in service, significantly speeding up cost recovery compared to the standard 27.5-year depreciation schedule.
• If a project meets affordable housing requirements (income-targeting rules from the Low-Income Housing Tax Credit program), the per-unit deduction jumps from $150,000 to $250,000, giving developers a stronger incentive to include affordable units.
• To keep the tax benefit, the owner must use the property as residential rental housing for at least 10 years. If they stop using it as rental housing before then, they must pay back the tax savings through a recapture provision. For affordable housing projects, this commitment period extends to 15 years.
• The bill has bipartisan support, introduced by Reps. Sanchez and Tenney along with Panetta and LaHood, and was referred to the House Ways and Means Committee. The tax changes would apply to property placed in service more than 12 months after the bill is enacted.
• Only newly constructed properties qualify for the bonus depreciation. The property must be built new by the taxpayer claiming the deduction, ruling out purchases of existing rental buildings.