AFFORDABLE HOUSING REVITALIZATION TAX CREDIT

HB0077

HOUSE BILL 77

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Rebecca Dow
and
Cindy Nava
and
Joshua N. Hernandez

and
Anita Gonzales

AN ACT

RELATING TO TAXATION; CREATING THE AFFORDABLE HOUSING
REVITALIZATION CORPORATE INCOME TAX CREDIT; PROVIDING A DELAYED
REPEAL.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
A new section of the Corporate Income and

Franchise Tax Act is enacted to read:

"[
NEW MATERIAL
] AFFORDABLE HOUSING REVITALIZATION
CORPORATE INCOME TAX CREDIT.--

A. A taxpayer that, beginning on the effective date
of this section and prior to January 1, 2037, incurs
rehabilitation expenses for a revitalization project in New
Mexico may claim a credit against the taxpayer's tax liability
imposed pursuant to the Corporate Income and Franchise Tax Act.
The tax credit provided by this section may be referred to as
the "affordable housing revitalization corporate income tax
credit".

B. The amount of tax credit shall be in an amount
equal to thirty percent of the rehabilitation expenses incurred
for a building or lot that has been vacant for more than two
years but less than five years, up to a maximum of two million
dollars ($2,000,000) per taxpayer, or forty percent of the
rehabilitation expenses incurred for a building or lot that has
been vacant for five years or longer, up to a maximum of four
million dollars ($4,000,000) per taxpayer; provided that:

(1) at least fifteen percent of the
residential housing units developed are affordable housing; and

(2) the rehabilitation expenses are at least
eighty percent but not more than one hundred twenty-five
percent of the estimated rehabilitation expenses stated in the
notice of intent to rehabilitate pursuant to Subsection C of
this section.

C. Prior to incurring rehabilitation expenses, a
taxpayer shall apply for pre-certification from the New Mexico
mortgage finance authority on forms and in the manner
prescribed by the authority. The application shall include a
proposal for the revitalization project and a notice of intent
to rehabilitate that provides the location of the building or
lot, the estimated expenses and the proposed use upon the
completion of the project. If the New Mexico mortgage finance
authority determines that the projected costs are likely to
meet the requirements to be rehabilitation expenses eligible
for the tax credit, the authority shall issue a pre-certification to the taxpayer; provided that pre-certification
received shall not mean that the actual costs for the
revitalization project will be approved for a credit provided
by this section.

D. Within one calendar year of the date the
revitalization project is complete and the building is ready
for occupancy, the taxpayer shall apply for certification of
eligibility from the New Mexico mortgage finance authority on
forms and in the manner prescribed by the authority. The
application shall include an affidavit from a certified public
accountant verifying that the rehabilitation expenses were
incurred by the taxpayer and meet the requirements of this
section. The aggregate amount of credits that may be certified
as eligible in a calendar year is one hundred million dollars
($100,000,000); provided that no more than fifty million
dollars ($50,000,000) in credits shall be allowed for projects
developed in areas that are not rural areas. Completed
applications shall be considered in the order received.
Applications for certification received after the limitation on
the aggregate amount of credits has been met in a calendar year
shall not be approved. If a taxpayer is eligible for the
credit, a dated certificate of eligibility shall be issued to
the taxpayer providing the amount of credit for which the
taxpayer is eligible.

E. A certificate of eligibility provided by this
section may be sold, exchanged or otherwise transferred to
another taxpayer for the full value of the credit. The parties
to such a transaction shall notify the department of the sale,
exchange or transfer within ten days of the sale, exchange or
transfer.

F. That portion of approved credit claimed by a
taxpayer that exceeds the taxpayer's income tax liability in
the taxable year in which the credit is claimed shall not be
refunded but may be carried forward for a maximum of five
consecutive taxable years.

G. To receive a tax credit provided by this
section, a taxpayer shall claim the credit on forms and in the
manner prescribed by the department within twelve months
following the calendar year in which the certificate of
eligibility was issued.

H. The credit provided by this section shall be
included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the annual aggregate cost of the
credit.

I. As used in this section:

(1) "abandoned building" means a structure or
part of a structure in New Mexico that has been unoccupied and
non-operational for income-producing purposes for at least two
years prior to the filing of a notice of intent to
rehabilitate;

(2) "affordable housing" means single-family
or multifamily residential housing primarily for persons or
households of low or moderate income;

(3) "low or moderate income" means a household
in which the current annual income is at or below eighty-five
percent of the area median income for the geographic area in
which the household is located, adjusted for family size, as
determined by the United States department of housing and urban
development;

(4) "rehabilitation expenses" means capital
expenditures incurred while participating in a voluntary
remediation program administered by the department of
environment or for a revitalization project, including
structural repairs, environmental remediation, site
improvements, new construction related to the project,
acquisition, design, engineering and permitting, but excluding
costs related to personal property;

(5) "revitalization project" means the
renovation, development or redevelopment of an abandoned
building or a vacant lot into single-family or multifamily
residential housing;

(6) "rural area" means a county that has a
population less than one hundred twenty-five thousand persons
according to the most recent federal decennial census or a
municipality with a population less than fifty thousand persons
according to the most recent federal decennial census; and

(7) "vacant lot" means a parcel of land in New
Mexico without a structure or part of a structure that has been
unoccupied and non-operational for income-producing purposes
for at least two years prior to the filing of a notice of
intent to rehabilitate."

SECTION 2.
DELAYED REPEAL.--Section 1 of this act is
repealed effective January 1, 2038.

SECTION 3.
APPLICABILITY.--The provisions of this act

apply to taxable years beginning on or after January 1, 2026.

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