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.
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.
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.
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.