Allows taxpayers to utilize alternative method of depreciation of certain expenditures in connection with construction of new affordable housing developments.

New tax break for affordable housing owners

New Jersey lets owners of qualifying new affordable housing developments use an alternative deduction under corporation business and gross income taxes. Owners can depreciate a share of their capital construction costs over 10 years. That share equals twice the percentage of housing units that qualify as affordable. The development must contain at least one unit, and at least 20% of its units must qualify as affordable. Affordable units serve, or are restricted to, households earning no more than 80% of regional median income, including qualifying deed-restricted units. Construction must start on or after March 20, 2024. The development must enter service in a tax year or privilege period beginning January 1, 2025, or later. It must either have no tax abatement or exemption under a Long Term Tax Exemption Law agreement, or receive no affordable housing construction subsidy. These subsidies include affordable housing financing from the Department of Community Affairs, New Jersey Housing and Mortgage Finance Agency, or municipal affordable housing trust funds. Energy-efficiency rebates and incentives do not count as these subsidies. The law takes effect immediately and requires the Division of Taxation director to issue implementing rules.