AFFORDABLE HOUSING REVITALIZATION TAX CREDIT
HB77 creates the Affordable Housing Revitalization Corporate Income Tax Credit, a new credit under the Corporate Income and Franchise Tax Act for taxpayers who rehabilitate abandoned buildings or vacant lots in New Mexico and convert them into residential housing. The credit is available for projects begun after the bill’s effective date and before January 1, 2037, and applies to taxable years beginning on or after January 1, 2026. To qualify, a project must meet affordability and cost requirements, including that at least 15% of the residential units developed be affordable housing and that rehabilitation costs fall within a specified range of the estimated project costs.
The credit amount is generally 30% of rehabilitation expenses for properties vacant more than two years but less than five years, capped at $2 million per taxpayer, or 40% for properties vacant five years or longer, capped at $4 million per taxpayer. The bill requires taxpayers to obtain pre-certification and later final certification from the New Mexico Mortgage Finance Authority, supported by a CPA affidavit, and it limits total annual certified credits to $100 million, with no more than $50 million for non-rural projects. Credits may be transferred to another taxpayer, unused amounts may be carried forward for up to five years, and the credit must be reflected in the state tax expenditure budget. The program is repealed effective January 1, 2038.
HB77 would amend state tax law by adding a new corporate income tax credit targeted at redevelopment and affordable housing production. It defines key terms such as abandoned building, vacant lot, affordable housing, low- or moderate-income household, rural area, and rehabilitation expenses, and it creates an administrative process for the Mortgage Finance Authority to review and certify eligible projects. The bill is designed to incentivize private investment in underused properties while steering some of that development toward housing for lower-income residents.
Because there are no committee transcripts or recorded votes provided, the bill’s sentiment and points of contention must be inferred from the structure of the proposal. The bill appears generally pro-development and pro-affordable-housing, with a strong emphasis on revitalizing vacant properties and encouraging projects in rural areas. Potential areas of debate likely include the size of the tax credit, the annual statewide cap, the transferability of credits, and whether the affordability requirement is sufficient to justify the fiscal cost to the state.
HB77 would add a new section to the Corporate Income and Franchise Tax Act establishing a refundable? no, nonrefundable, transferable corporate income tax credit for qualifying rehabilitation projects. It would affect taxpayers undertaking redevelopment of abandoned buildings or vacant lots, the New Mexico Mortgage Finance Authority, and the Taxation and Revenue Department, while also requiring the credit to be included in the state tax expenditure budget. The bill creates a temporary incentive program that sunsets through delayed repeal on January 1, 2038.
No committee discussion or vote record is provided, so there is no direct evidence of support or opposition from legislators. Based on the bill text alone, the measure appears to be framed positively as an affordable-housing and revitalization incentive, with policy goals that are likely to attract support from housing advocates, redevelopment interests, and rural communities. At the same time, the size of the credit and the annual cap suggest it could draw scrutiny from fiscal conservatives or lawmakers concerned about revenue loss and program oversight.
The main likely points of contention are the fiscal cost of the credit, the annual $100 million cap, and the allocation of up to $4 million per taxpayer for long-vacant properties. Another possible debate point is the transferability of certificates, which increases flexibility for taxpayers but can also complicate administration and raise concerns about secondary-market use of tax credits. There may also be disagreement over whether the 15% affordable-housing requirement is strong enough, and whether the rural/non-rural cap split fairly directs benefits to underserved areas.