Housing Opportunities and Preservation Enhancement Act of 2026
Sponsored By: Representative Carey, Mike [R-OH-15]
Introduced
Summary
Tax incentives for preserving and rehabilitating affordable rental housing would be added to the tax code to encourage long-term investment in units serving low- and moderate-income households.
Show full summary
- Low- and moderate-income households: The bill targets preservation and rehabilitation of rental units that serve these households by tying tax benefits to rent restrictions and income-targeting rules.
- Owners and developers: Rehabilitation spending must be certified by an independent attorney or certified public accountant and meet a threshold equal to the greater of 20% of the building's adjusted basis or $20,000 per residential unit, with that threshold inflation-adjusted after 2026.
- Investors, partnerships, and financing: Qualified property gets a shorter 15-year depreciation recovery and basis at sale after not less than 10 years is set to fair market value. The bill also exempts qualified property from passive activity loss rules and the profit-motive test and changes how nonrecourse financing and at-risk rules apply.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 1 benefits, 0 costs, 1 mixed.
Tax breaks for affordable landlords
If enacted, owners of qualified property would get several tax and financing advantages. Owners could use a 15-year depreciation life for qualifying buildings and for buildings that will become qualified within 24 months. Rental activity from qualified property would not be treated as passive, which could let owners use losses and deductions against other income. Loans from tax-exempt organizations to partnerships holding qualified property would be treated as qualified nonrecourse financing and partners would generally not be treated as bearing the loan risk. If a qualified property is sold after at least 10 years, the property's tax basis for gain would be set to its fair market value on the sale date. Owners who claim certain energy credits would not have to reduce the building's depreciable basis, and eligible capital grants to public or nonprofit housing entities would be excluded from gross income and would not reduce basis. The bill would also protect owners' tax benefits when government or qualifying nonprofits have rights to buy after year 10, provided the buyer pays at least the defined minimum purchase price (outstanding principal excluding debt incurred in the prior 5 years, plus taxes tied to the sale).
Rules for qualifying rental buildings
If enacted, the bill would add a new tax subchapter that defines which rental buildings can get special tax treatment. To qualify, at least 70% of units must be rent-restricted and occupied by households at or below 80% of area median income. Rehab spending in any 24-month period must meet the greater of 20% of the building's adjusted basis or $20,000 per unit (the $20,000 amount is indexed for inflation after 2026 and rounded to the nearest $100). The building must have been placed in service more than 15 years before the rehab. Partnerships must have qualified nonprofit, government, tribal, or public-housing organizations as managing members. Partnerships would need a written certification from an independent attorney or CPA that the rehab test was met.
Sponsors & CoSponsors
Sponsor
Carey, Mike [R-OH-15]
OH • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov