Texas Governor Greg Abbott announced on Monday that the Texas Department of Housing and Community Affairs (TDHCA) had awarded almost $90 million in tax credits. These housing tax credits from Texas will indirectly help residents as the credits will be used to fund the development of properties offering reduced rent.
How Will Housing Tax Credits From Texas Help Residents?
In a press release on Monday, Governor Abbott announced that the TDHCA had awarded $87.7 million in housing tax credits to fund the development or rehabilitation of 54 rental properties.
The housing tax credits from Texas have been provided through the TDHCA Housing Tax Credit Program (HTC). The objective is to offer reduced rents and increase housing options for Texans.
According to the press release, the credits will assist developers to construct or rehabilitate over 3,100 housing units, as well as offer affordable rent to households with income up to 80% of the median family income in their respective areas.
“These awards will help developers and housing agencies make much-needed improvements to affordable housing units and offer affordable rent prices to Texas families and Texans in need,” Governor Abbott said in a statement.
The housing tax credits are expected to fund the development of 37 new properties with 2,153 units and the rehabilitation of 15 properties with 911 units. Also, the credit will go toward the adaptive reuse of two existing properties in Dallas and Abilene with 97 units.
Over $16 million has also been set aside for the rehabilitation or reconstruction of aging housing developments. The funding will help developers develop eight properties for elderly Texans (age 55 or older) and five properties for general residents.
A point to note is that investors have the option to purchase the credits allocated to developers by investing in the property. Investors will be able to use the credits toward their federal tax liability each year for ten years (dollar-for-dollar basis)
“Today’s awards have an approximate value of $877 million over the 10-year term,” the press release says.
Governor Approves Property Tax Relief Plan As Well
Governor Abbott’s announcement regarding housing tax credits from Texas comes about a week after the governor signed an $18 billion tax relief plan for property owners. The plan comprises Senate Bill 2 (property tax cuts) and Senate Bill 3 (tax relief for franchises and small businesses).
This new tax relief plan includes a slew of measures, including reducing school district property tax rates by 10.7 cents per $100 valuation; raising the homestead exemption from $40,000 to $100,000; capping appraisal value increases for properties, which are not considered homesteads valued at $5 million or lower at 20% per year from 2024-2027; and exempting businesses with yearly revenue below $2.47 million ($1.23 million previously) from the franchise tax.
Although the governor has approved the relief plan, it still requires a nod from Texas voters.
