Rental Housing Investment Act

Key Points

• This bill creates a large first-year tax deduction for people and companies that build new rental housing with at least two units. Instead of depreciating the property over decades, owners can deduct up to $150,000 per dwelling unit in the year the building opens.
• If a developer agrees to make units affordable for lower-income families (meeting the same standards as the Low-Income Housing Tax Credit program), the per-unit deduction jumps to $250,000. This bigger incentive is designed to make it more profitable to build homes for people who struggle to pay market-rate rent.
• To keep the tax break, market-rate rental buildings must stay in use as rentals for at least 10 years. Affordable housing projects face a stricter 15-year requirement. If the owner stops renting the property before the deadline, they must pay back the tax benefit.
• The bill only applies to newly constructed buildings — it cannot be used for purchasing existing rental properties. The property must be placed in service in the United States, and the original use must start with the taxpayer claiming the deduction.
• The tax incentive would take effect 12 months after the bill is signed into law, giving the IRS and developers time to prepare. It was introduced by Sen. Blunt Rochester and referred to the Senate Finance Committee.

Votes

No votes have been recorded for this legislation yet.