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Middle-Income Housing Tax Credit

Concerning the creation of a pilot program for a middle-income housing income tax credit.
2024 Regular Session
Fiscal Policy & Taxes
Bill Summary

The bill creates a pilot program for an income tax credit for owners of qualified housing developments focused on rental housing for middle-income individuals and families. Middle-income individuals and families are those individuals and families with an annual household income between 80% and 120% of the area median income of the households of the same size in the county in which the housing development is located; except that, for rural resort counties, the annual income is between 80% and 140% of the area median income of the households of the same size in the county in which the housing development is located.

During the calendar years commencing on January 1, 2025, and ending on December 31, 2027, the owner of a qualified housing development may be allocated a credit by the Colorado housing and finance authority (CHFA). The amount of the credit is determined by CHFA. The allocation of credits must follow CHFA's published allocation plan, and the aggregate amount of credits allocated in one calendar year cannot exceed $10 million. The aggregate amount of any unallocated credits remaining as of December 31, 2027, is added to the amount of credits that CHFA may allocate for the state affordable housing tax credit. The allocated credit amount may be used to offset a qualified taxpayer's income taxes each year for a period of 5 years, beginning in the year that the qualified housing development is placed in service. Although the credit may only be claimed for a 5-year period, the owner is required to provide middle-income housing in the qualified housing development for 15 years. A portion of the credit may be recaptured under certain conditions, for instance when the owner reduces the number of units serving middle-income individuals and families. In addition, the credit is allowed against insurance premium taxes for eligible taxpayers that are not subject to income taxes. A governmental or quasi-governmental entity, including the middle-income housing authority, may be allocated a credit if it owns a qualified development. A credit allocated to a governmental or quasi-governmental entity is subject to the same conditions, allocation rights, and recapture as a credit allocated to a qualified owner; except that a governmental or quasi-governmental entity may also transfer credits to any qualified taxpayer.

The bill also requires CHFA to annually report on the middle-income housing tax credit pilot program to the general assembly, and to make the report publicly available, and, as part of CFHA's final annual report, to provide certain information summarizing the overall success of the pilot program .

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)




Bill Text

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The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details