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Through legislative mandate in 1987, the Nevada Housing Division, was designated as the administrator of the Federal Low-Income Housing Tax Credit Program for the entire State of Nevada.
The Housing Division develops an annual Tax Credit Allocation Plan within the provisions of Section 252 of the Tax Reform Act of 1986 and was codified as Section 42 of the Internal Revenue Code of 1986, as amended. Tax credits have the effect of reducing federal tax liability for a period of ten (10) years to the owners of such projects.
The Multi-family low-income housing tax credit program creates economic incentives to for-profit or non-profit developers to produce low-income housing. Approximately $2.5 million in tax credit is available annually in Nevada. Tax credits can be used to cover the cost of construction or rehabilitation of rental units. Projects in these categories may be eligible for up to 9% (approximate) in tax credit.
Most multi-family apartment projects which need $5+ million in financing elect to finance with federal tax exempt private activity bond. See Multi-Family Financing. Projects utilizing private activity bonds may also be entitled to a 4% (approximate) tax credit on certain projects. These tax credits are allocated outside the state's ceiling cap and do not effect the annual allocation.
For additional information click on the Low-Income Housing Tax Credit Program: