Alfano Law Office, PLLC

Alfano Law Office, PLLC
Phone: (603) 856-8411 • Fax (603) 290-5521
4 Park Street, Concord, NH 03301
  • Home
  • Real Estate Law
    • Road Law
    • Commercial Real Estate Law
    • Tax Abatements
    • Business Law
  • Estate Planning
  • About Us
    • Paul J. Alfano, Real Estate Attorney
    • John F. Hayes, Attorney
    • Terrie Harman, Attorney
    • Jim Soucy, Attorney
    • Marissa Schuetz, Attorney
    • Michael D. Cameron, Attorney
    • Privacy Policy
  • Articles
  • Contact Us
    • Directions
  • Road Law Guide
  • NH Tax Abatement
    • Tax Abatement Team
    • Grounds for Abatement
    • Municipal Application
    • Owners of Properties Outside New Hampshire
    • Transfer Tax Allocation
    • Recent Laws and Rulings
  • Resources and Links
    • Allobar Strategies
    • Calendar and Key Dates
    • Equalization Ratio
    • NAPTA
  • Covid-19 Updates
You are here: Home / General / August 2015 NH Property Tax Alert – Low Income Housing Tax Credits; Taxation of Long Term Leases; Extending the Statute of Limitations

August 2015 NH Property Tax Alert – Low Income Housing Tax Credits; Taxation of Long Term Leases; Extending the Statute of Limitations


Property Tax Bill with DollarLow Income Housing Tax Credits- What are they?

Internal Revenue Code 26 U.S.C. §42 allows the federal government to make available federal income tax credits to incentivize private developers to construct and invest in low-income housing. Low income housing tax credits (“LIHTC”) are allocated between the states, and awarded at the state level by a housing credit agency. In New Hampshire, these credits are awarded by the New Hampshire Housing Finance Authority.

In essence, the LIHTC program grants federal income tax credits over a ten- year credit period to eligible projects (although many projects claim credits over 11 years due to rules on how many credits may be claimed in the first year of the credit period).  See IRS Form 8586 (explaining regulations on first year credits). Developers or property owners hoping to take advantage of the LIHTC in New Hampshire typically propose a project to the New Hampshire Housing Finance Authority, whose Board of Directors approves on an annual basis eligible projects across the state and allocates tax credits among eligible projects. Private investors purchase the allocated credits, and become limited partners in the projects.  Because LIHTC is a dollar-for-dollar tax credit, and provides a dollar-for-dollar reduction in a taxpayers federal income tax, these credits may be more appealing to investors than tax deductions, which only provide a reduction in the investor’s taxable income.

Investors typically purchase credits as construction on the project occurs, since the investor capital is the major funding source of low income housing construction. According to the New Hampshire Housing Finance Authority, when credits amount to approximately $2.8 million a year, they are leveraged to generate $25 million in cash equity for project funding.  https://www.ncsha.org/story/new-hampshire-hfa-low-income-housing-tax-credit-brings-housing-jobs-new-hampshire . However, it is important to note that the original allocated value of credits may be subject to change during or after the construction process; the amount of the credit is ultimately contingent on the actual, rather than projected, cost of the project, as well as the percentage of the project’s units ultimately rented to low-income tenants. 26 U.S.C  §42 (g).  Regardless of these factors, the credit cannot exceed the amount allocated by the New Hampshire Housing Finance Authority. It is important to emphasize LIHTC are claimed equally over the credit period, not as a lump sum.

Housing Lease 460 × 240Long Term Leases

New Hampshire, through the Department of Revenue Administration (DRA), imposes taxes on the transfer of real estate, which typically is the sale of land or land and building(s). Additionally, the DRA may tax long-term ground leases of 99 years or longer, inclusive of any extensions to the lease. In recent years, there has been some question among the state legislature as to whether DRA has authority to tax shorter ground leases, or those of duration less than 99 years.

In response, the New Hampshire senate introduced SB-232-FN-A, a bill explicitly exempting leases of less than 99 years from the real estate transfer tax. The state legislature approved SB-232-FN-A on July 13, 2015, and the bill came into effect as of July 1, 2015. SB-232-FN-A provides ground leases are exempt from the real estate transfer tax “… when the term of the lease, including all renewals, is less than 99 years.” The clarification that short-term ground leases are exempt from the real state transfer tax has financial implications for holders of ground leases, who are no longer taxed at the real estate transfer level on such leases. Long term, these transfer tax savings may have several impacts on the New Hampshire economy, including  providing additional capital for future real estate transactions.

StatuteLimitations 460 × 240Extending the Statute of Limitations – the Continuing Violation Doctrine

In the recent Eldridge v. The Rolling Green at Whip-Poor-Will Condominium Owners’ Association opinion, issued on August 7, 2015, the New Hampshire Supreme Court recognized the continuing violation doctrine as a “narrow exception” to the statute of limitations governing discrimination suits. Recognized in other jurisdictions, the continuing violation doctrine allows, “a plaintiff [to] obtain recovery for discriminatory acts that otherwise would be time-barred so long as a related act fell within the limitations period.” Eldridge, 2014-540 (2015), citing Ayala v. Shinseki, 780 F.3d 52, 57 (1st Circ. 2015).  The doctrine “applies… to claims that cannot be said to occur on a particular day and that by their very nature require repeated conduct.” Id.

While the continuing violation doctrine has only been recognized in New Hampshire under the Eldridge holding and as applicable to discrimination suits, the same principal is applicable in other areas of the law, such as the “continuing wrong doctrine”  in tort cases. The expansion of this notion to discrimination suits in Eldridge may signal the Court’s willingness to ultimately apply the same principal to broader areas of law, such as property law. Given the Court’s liberal reading of the statute of limitations and the continuing violation doctrine shown in the Eldridge case, the court may, for example, agree to postpone the statute of limitations on property disputes based on continuing wrongdoing by property users. For now, the Eldridge opinion is significant because it gives attorneys one more tool to combat the statute of limitations in discrimination cases, but it may in the future serve as a powerful doctrine for attorneys in all areas of civil litigation.

 

Filed Under: General, Legislation, New Hampshire Property Tax Alerts, Property Tax Law, Real Estate Law

The above information is for informational purposes only and does not constitute legal advice.

Important Registry Updates
Important Court Updates

Subscribe to the Alfano Law Property Rights Alert

Sign Up Now

For Email Newsletters you can trust.
Allobar Strategies

NH Tax Abatement

  • Road Law Guide
  • NH Tax Abatement
    • Tax Abatement Team
    • Grounds for Abatement
    • Municipal Application
    • Owners of Properties Outside New Hampshire
    • Transfer Tax Allocation
    • Recent Laws and Rulings
  • Resources and Links
    • Allobar Strategies
    • Calendar and Key Dates
    • Equalization Ratio
    • NAPTA
  • Covid-19 Updates

NH Real Estate Law Articles

  • Court Updates
  • Covid-19
  • Estate Planning
  • General
  • Legislation
  • New Hampshire Property Tax Alerts
  • Property Investments
  • Property Tax Law
  • Real Estate Law
  • Road Law
  • Taxes

Recent News Letters

March 2020

December 2019

November 2019

October 2019

August 2019

July 2019

May 2019

Recent Articles

NH Supreme Court Holds that Tenants’ Right of First Offer to Purchase Rented Property can be Triggered by the Owners’ Intent to Sell.

It is common for residential leases to include options … [Read More...]

March 1 is the Deadline to Request a Refund of New Hampshire Property Taxes

March 1, 2021 is the deadline to challenge your 2020 real … [Read More...]

NHPVRTA SUBMITS DRAFT OF NEW BILL ON PRIVATE ROADS TO THE NH SENATE

New Hampshire Private Road Taxpayers Alliance (NHPVRTA) is a … [Read More...]

Understanding Commercial Site Planning in New Hampshire

Obtaining a rezoning of property to a commercial zoning … [Read More...]

Article Archives

  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • October 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • June 2016
  • April 2016
  • March 2016
  • January 2016
  • December 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • September 2014
  • August 2014
  • June 2013
  • February 2012
  • December 2011
  • May 2011
  • July 2010
  • December 2005
  • Facebook
  • LinkedIn
  • Twitter

Alfano Law Office, PLLC, 4 Park Street, Concord, NH 03301 USA | Phone: (603) 856-8411
Copyright © 2021 · Alfano Law Office, PLLC. All Rights Reserved · Website design by InterActive Synergy, LLC

Sign up to receive our FREE Road Law Guide

Everything you need to know about navigating public and private road laws in New Hampshire.

    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.