Provides an 8% tax rate for those properties that are encumbered by a deed restriction for low-income housing set at 80% or 60% of adjusted median income established by HUD.
Impact
This legislation will positively impact state laws by formalizing a tax structure that better supports low-income housing initiatives. The consistency in tax rates for such properties ensures that municipalities cannot impose higher rates than established, thereby promoting stability and attracting potential investment in low-income housing. Moreover, the bill outlines provisions for properties converted from non-residential to residential use, creating a favorable taxation environment for real estate developers and landlords who focus on affordable housing.
Summary
Bill S0963 seeks to amend the taxation laws in Rhode Island specifically related to low-income housing. It establishes an 8% tax rate on properties classified as low-income housing that are encumbered by a deed restriction. These properties must meet certain criteria, such as housing units that are affordable to households earning below 80% or 60% of the statewide area median income, adjusted for family size. The bill aims to provide financial relief to landlords of low-income housing, encouraging the development and preservation of affordable housing units within the state.
Contention
Debate surrounding Bill S0963 may emerge from various stakeholders. Proponents argue that the bill effectively incentivizes the creation and maintenance of low-income housing, thus addressing housing shortages and affordability issues in the state. However, opponents could voice concerns about the implications for local governmental authority and the potential for revenue losses in municipalities that may rely on property taxes from conventional housing. Stakeholders may express fears that extensive tax breaks for low-income housing could lead to reduced building opportunities for market-rate developments, complicating the housing landscape further.
Provides that only residential properties and new or rehabilitated residential affordable housing units would be subject to the tax under § 44-5-13.1 relating to taxation of low-income housing.
Provides that only residential properties and new or rehabilitated residential affordable housing units would be subject to the tax under § 44-5-13.1 relating to taxation of low-income housing.
Allows a municipality to set its own conveyance tax rate for residential properties sold in excess of $800,000.00 at $10 per $500. Provides collected taxes to be in a restricted account and distributed within 2 years for affordable housing.
Allows for a one-time two percent (2%) supplemental cost of living adjustment for plan year 2025 to the public pension benefits administered by the ERSRI, and allows for those benefits to be deducted from the taxpayer's adjusted gross income.