                                 CODE OF VIRGINIA

TAX CREDIT FOR PARTICIPATING LANDLORDS (§ 58.1-439.12:04)

A. As used in this section, unless the context clearly shows otherwise, the term
or phrase:
			&#8220;Dwelling unit&#8221; means an individual housing unit in an apartment
building, an individual housing unit in multifamily residential housing, a
single-family residence, or any similar individual housing unit.
			&#8220;Eligible census tract&#8221; means a census tract in Virginia in which
less than 10 percent of the residents live below the poverty level, as defined
by the United States government and determined by the most recent United States
census.
			&#8220;Eligible non-metropolitan census tract&#8221; means a census tract in
Virginia that (i) is not in the Richmond Metropolitan Statistical Area, the
Washington-Arlington-Alexandria Metropolitan Statistical Area, or the Virginia
Beach-Norfolk-Newport News Metropolitan Area and (ii) in which less than 40
percent of the residents live below the poverty level, as defined by the United
States government and determined by the most recent United States census.
			&#8220;Housing authority&#8221; means a housing authority created under
Article 1 (&#xA7; 36-1 et seq.) of Chapter 1 of Title 36 or other government
agency that is authorized by the United States government under the United
States Housing Act of 1937 (42 U.S.C. &#xA7; 1437 et seq.) to administer a
housing choice voucher program, or the authorized agent of such a housing
authority that is authorized to act upon that authority&#8217;s behalf. The term
shall also include the Virginia Housing Development Authority.
			&#8220;Housing choice voucher&#8221; means tenant-based assistance by a
housing authority pursuant to 42 U.S.C. &#xA7; 1437f et seq.
			&#8220;Participating landlord&#8221; means any person engaged in the business
of the rental of dwelling units who is (i) subject to the Virginia Residential
Landlord and Tenant Act (&#xA7; 55.1-1200 et seq.) and (ii) performing
obligations under a contract with a housing authority relating to the rental of
qualified housing units.
			&#8220;Qualified housing unit&#8221; means a dwelling unit that is located in
either an eligible census tract or, for purposes of subdivision B 2, an eligible
non-metropolitan census tract for which a portion of the rent is paid by a
housing authority, which payment is pursuant to a housing choice voucher
program.

B. 1. For taxable years beginning on or after January 1, 2010, but before
January 1, 2026, a participating landlord renting a qualified housing unit in an
eligible census tract shall be eligible for a credit against the tax levied
pursuant to § 58.1-320 or 58.1-400 in an amount equal to 10 percent of the fair
market value of the rent for the unit, computed for that portion of the taxable
year in which the unit was rented by such landlord to a tenant participating in
a housing choice voucher program. The Department of Housing and Community
Development shall administer and issue the tax credit under this section. If (i)
the same parcel of real property contains four or more dwelling units and (ii)
the total number of qualified housing units on the parcel in the relevant
taxable year exceeds 25 percent of the total dwelling units on the parcel, then
the tax credit under this section shall apply only to a limited number of
qualified housing units with regard to such parcel of real property, with the
limited number being equal to 25 percent of the total dwelling units on such
parcel of real property in the taxable year.

   2. For taxable years beginning on or after January 1, 2024, but before January
   1, 2026, a participating landlord renting a qualified housing unit in an
   eligible non-metropolitan census tract shall be eligible for a credit against
   the tax levied pursuant to &#xA7; 58.1-320 or 58.1-400 in an amount equal to
   10 percent of the fair market value of the rent for the unit, computed for
   that portion of the taxable year in which the unit was rented by such landlord
   to a tenant participating in a housing choice voucher program. The Department
   of Housing and Community Development shall administer and issue the tax credit
   under this section. If (i) the same parcel of real property contains four or
   more dwelling units and (ii) the total number of qualified housing units on
   the parcel in the relevant taxable year exceeds 25 percent of the total
   dwelling units on the parcel, then the tax credit under this section shall
   apply only to a limited number of qualified housing units with regard to such
   parcel of real property, with the limited number being equal to 25 percent of
   the total dwelling units on such parcel of real property in the taxable year.

C. The Department of Housing and Community Development shall issue tax credits
under this section on a fiscal year basis. For fiscal years beginning before
July 1, 2024, the maximum amount of tax credits that may be issued under this
section in each fiscal year shall be $250,000. For fiscal years beginning on and
after July 1, 2024, (i) the maximum amount of tax credits that may be issued
under subdivision B 1 in each fiscal year shall be $400,000 and (ii) the maximum
amount of tax credits that may be issued under subdivision B 2 in each fiscal
year shall be $100,000.

D. Participating landlords shall apply to the Department of Housing and
Community Development for tax credits under this section. The Department of
Housing and Community Development shall determine the credit amount allowable to
the participating landlord for the taxable year and shall also determine the
fair market value of the rent for the qualified housing unit based on the fair
market rent approved by the United States Department of Housing and Urban
Development as the basis for the tenant-based assistance provided through the
housing choice voucher program for the qualified housing unit. In issuing tax
credits under this section, the Department of Housing and Community Development
shall provide a written certification to the participating landlord, which
certification shall report the amount of the tax credit approved by the
Department. The participating landlord shall attach the certification to the
applicable income tax return.

E. The Board of Housing and Community Development shall establish and issue
guidelines for purposes of implementing the provisions of this section. The
guidelines shall provide for the allocation of tax credits among participating
landlords requesting credits. The guidelines shall be exempt from the
Administrative Process Act (&#xA7; 2.2-4000 et seq.).

F. In no case shall the amount of credit taken by a participating landlord for
any taxable year exceed the total amount of tax imposed by this chapter for the
taxable year. If the amount of credit issued by the Department of Housing and
Community Development for a taxable year exceeds the landlord&#8217;s tax
liability imposed by this chapter for such taxable year, then the amount that
exceeds the tax liability may be carried over for credit against the income
taxes of the participating landlord in the next five taxable years or until the
total amount of the tax credit issued has been taken, whichever is sooner.
Credits granted to a partnership, limited liability company, or electing small
business corporation (S corporation) shall be allocated to the individual
partners, members, or shareholders, respectively, in proportion to their
ownership or interest in such business entities.

G. 1. For fiscal years beginning before July 1, 2024, in the event that the
amount of the qualified requests for tax credits for participating landlords in
the fiscal year exceeds $250,000, the Department of Housing and Community
Development shall prorate the tax credits among the qualified applicants.

   2. For fiscal years beginning on and after July 1, 2024, in the event that the
   amount of the qualified requests for tax credits for participating landlords
   in the fiscal year exceeds $500,000, the Department of Housing and Community
   Development shall prorate the tax credits among the qualified applicants.

HISTORY: 2010, cc. 520, 608; 2013, cc. 23, 374; 2016, c. 305; 2019, cc. 19, 272;
2020, cc. 430, 1032; 2022, c. 252; 2024, c. 322.