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Bill

HB 946

Income tax, state; affordable rental housing tax credit.

2026 Regular Session

Virginia bill creates state income tax credit to incentivize private investment in affordable rental housing development, offsetting state revenues to expand supply in underserved markets.

Assigned HFIN sub: Subcommittee #1
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WeVote Research Nonpartisan
Bill Summary · HB 946

Legislative bill overview

HB 946 proposes to create a state income tax credit in Virginia for individuals or entities that invest in or contribute to affordable rental housing projects. The bill aims to incentivize private investment in affordable housing by offering tax benefits to qualifying participants. This would be administered through Virginia's income tax system.

Why is this important

Virginia faces a significant shortage of affordable rental housing, particularly in high-cost urban and suburban areas. By leveraging tax incentives, the state hopes to attract private capital and development to increase the supply of affordable units without direct government expenditure. This approach attempts to address housing affordability while relying on market-based mechanisms.

Potential points of contention

  • Cost to state revenues: Tax credits reduce state income tax collections; the fiscal impact depends on credit size, eligibility scope, and participation rates, which could be substantial if broadly utilized
  • Definition of "affordable": The bill's effectiveness hinges on how affordable housing is defined (income thresholds, rent caps, duration requirements) and whether those definitions adequately serve lower-income households versus moderate-income groups
  • Equity and targeting concerns: Questions about whether tax credits primarily benefit developers and investors rather than renters, and whether credits should be geographically targeted to areas with greatest housing shortages versus statewide availability

Compiled from official sources — confirm details with the bill’s official record.

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