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Bill

H 408

TAXATION – Adds to existing law to provide for the Idaho Middle Income Property Development Tax Credit and the Middle Income Land Trust Tax Credit.

68th Legislature, 1st Regular Session (2025)

House Bill 408 offers tax credits to develop affordable homes for middle-income families in Idaho, ensuring long-term affordability and reducing reliance on public assistance.

Reported Printed; Filed in the Office of the Chief Clerk
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Bill Summary · H 408

Summary of House Bill 408: Idaho Middle Income Property Development Tax Credit

Purpose and Intent

House Bill 408 aims to tackle Idaho's housing affordability crisis by introducing two new tax credits: the Idaho Middle Income Property Development Tax Credit and the Middle Income Land Trust Tax Credit. The bill is designed to incentivize the development of homes for middle-income households, defined as those earning up to 120% of the Area Median Income (AMI). The legislation seeks to promote sustainable home ownership and increase the availability of deed-restricted homes and community land trust properties, ensuring long-term affordability for working families in Idaho.

Key Provisions

1. Middle Income Property Development Tax Credit

  • Eligibility: Taxpayers who develop and sell deed-restricted properties can claim a tax credit.
  • Credit Amount: The credit equals the difference between the sale price and the appraised value of the property at the time of sale, as determined by a third-party appraiser.
  • Carry Forward: If the credit exceeds the taxpayer's tax liability, the excess can be carried forward for up to 10 years.

2. Definition of Deed-Restricted Property

  • Criteria: Properties must be newly constructed and sold to households earning at or below 120% of AMI.
  • Homestead Requirement: The property must be used as the purchaser's primary residence.
  • Sale Restrictions: The resale price is limited based on inflation rates, market appreciation, or a fixed annual percentage increase, ensuring long-term affordability.
  • Duration of Restrictions: Deed restrictions must remain in place for at least 60 years.

3. Role of Deed Restriction Program Managers

  • Verification: Non-profit entities will manage deed-restricted properties, verifying purchaser eligibility and compliance with income requirements.
  • Ongoing Monitoring: Program managers are required to conduct regular home visits to ensure compliance with homestead requirements.

Fiscal Impact

  • State General Fund: The implementation of this bill is projected to reduce general fund revenue by approximately $5 million annually due to the issuance of tax credits.
  • Local Governments: The legislation is expected to positively impact local governments by stabilizing property values and reducing reliance on public assistance programs related to housing.
  • Fiscal Timeline: The fiscal impact is anticipated to begin in Fiscal Year 2026 and will depend on program participation rates and housing market trends.

Procedural Aspects

  • Introduced: March 13, 2025
  • Status: Reported Printed and filed in the Office of the Chief Clerk as of March 14, 2025.
  • Emergency Declaration: The bill includes a declaration of emergency, allowing for retroactive application.

Conclusion

House Bill 408 represents a strategic effort to enhance housing affordability in Idaho by providing tax incentives for the development of homes targeted at middle-income families. By establishing clear guidelines for deed restrictions and program management, the bill aims to create a sustainable framework for affordable housing solutions in the state.

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

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