Capito sponsors bipartisan Rural Historic Tax Credit Improvement Act

U.S. Sen. Shelley Moore Capito (R-WV) on Dec. 19 proposed a bipartisan bill that aims to reduce cost-burdens for rural homeowners and small developers, streamline processes, and provide affordable housing incentives in America’s rural communities.

Specifically, the Rural Historic Tax Credit Improvement Act, S. 5607, which is cosponsored by U.S. Sen. Mark Warner (D-VA), would amend the Internal Revenue Code of 1986 to enhance the rehabilitation credit for buildings in rural areas.

“Being a rural state shouldn’t mean losing out on private investment incentives like tax credits to help us preserve our communities’ history and revitalize local economies,” Sen. Capito said. “The Rural Historic Tax Credit Improvement Act will help level the playing field for communities in West Virginia by attracting investment for economic expansion and additional housing supply.”

If enacted, S. 5607 would make historic tax credit projects in rural areas eligible for an increased credit from the current 20 percent to 30 percent, and the bill includes an additional increase in the credit to 40 percent for affordable housing creation, according to a bill summary provided by the senators.

The measure also would permit the credit to be used in addition to the Low-Income Housing Tax Credit (LIHTC); allow small rural projects to claim the credit in the first year of use; allow transferability of the credit to a third-party; and eliminate basis adjustment to simplify credit transactions, the summary says. 

“By expanding access to historic tax credits, we can preserve our nation’s rich heritage while also incentivizing the construction of more affordable housing,” said Sen. Warner. “I’m proud to join Sen. Capito in introducing this legislation to bring new life to abandoned buildings and grow the housing stock in rural communities.”

The National Trust for Historic Preservation, the Preservation Alliance of West Virginia, The Historic Tax Credit Coalition, and Main Street America endorsed the bill, which has been referred to the U.S. Senate Finance Committee for consideration.