Eligible landlords could claim credits for certified affordable rental units

The proposal would give eligible landlords a state income tax credit for each certified affordable unit they rent. Eligible landlords are individuals, Virginia limited liability companies with 10 or fewer employees, and tax-exempt nonprofits that rent units covered by Virginia landlord-tenant law. Certain pooled-investor entities holding interests in more than 50 single-family homes are excluded. A unit must have monthly rent no higher than 30 percent of the local area median income and meet required safety and habitability standards. The credit is nonrefundable and cannot exceed the landlord's tax liability; unused amounts may carry forward for up to five years. The credit is capped at $15,000 per landlord and $5 million statewide each year, with credits allocated first come, first served. Landlords must apply for certification and attach the department's written certification to their tax return. The credit would apply to tax years beginning on or after January 1, 2026, and before January 1, 2031.