Jose Alvarez wants new tax credits to convert hotels into homes

A proposed tax credit aims to facilitate the transformation of hotels into residential housing.

Kissimmee Democrat Rep. Jose Alvarez filed the bill (HB 685) that would create the Hotel-to-Home Tax Credit Program. The program would be allocated to designated projects by the Florida Housing Finance Corporation (HFC) to support the redevelopment of hotels into residential units.

The HFC would determine if a project qualifies for the tax credit, which the bill defines as a project to redevelop a structure initially developed as a hotel into residential housing. It would further establish procedures necessary for properly allocating and distributing tax credits and give the power to allocate them.

HFC would be responsible for adopting allocation procedures to ensure that tax credits are used fairly, and the board of directors would administer the procedures.

Considerations would need to be made regarding the application’s timelines, the location of the proposed project, and the relative need for housing in the area. The project’s economic feasibility, the applicant’s ability to complete it within the calendar year for which the tax credit is sought, and the speed at which the converted residential housing would be occupied would also need to be considered.

Furthermore, HFC would be required to prepare an annual plan that would need to be approved by the Governor and would contain general guidelines for tax credit allocations.

The tax credit allocated to a designated project may be subject to transfer by the recipient; however, tax credits can only be transferred once. The Department of Revenue would be responsible for adopting rules to facilitate this.

Taxpayers who want to benefit from the program must submit applications that include project details. The HFC may request additional information as needed.

Applicants could claim a tax credit of up to 9% of the project’s total cost, applied annually for five years. The maximum credit would help to ensure the project remains financially feasible.

If passed, the bill would come into effect July 1.