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Live Local Act: Sales Tax Refund for Affordable Housing Development

Sara Barli Herald, Lauren O. Cankaya & Nicholas Noto
Multifamily Development

The Live Local Act (S.B. 102) incorporated relief from sales tax for building materials used in eligible residential units that have a recorded FHFC agreement. 

What Residential Units Qualify: An eligible residential unit is defined as “newly constructed units within an affordable housing development which are restricted under the land use restriction agreement.” Newly constructed in this context is defined as “improvements to real property which did not previously exist or the construction of a new improvement where an old improvement was removed” and excludes “the renovation, restoration, rehabilitation, modification, alteration, or expansion of buildings already located on the parcel on which the eligible residential unit is built.” 

Which Categories of Affordable Housing Development Qualify: Affordable housing development in this context is limited to residential units for households meeting the extremely-low-income (up to 30% of the Annual Median Income (AMI)), very-low-income (between 30-50% of AMI), or low-income (between 50-80% of AMI) thresholds.

What Building Materials are Eligible: Building materials are defined as “tangible personal property that becomes a component part of eligible residential units in an affordable housing development”, and while this… includes appliances, it specifically excludes plants, landscaping, fencing and hardscaping.”  This exemption “inures to the owner at the time an eligible residential unit is substantially completed, but only through a refund of previously paid taxes.” 

How to Get Your Refund: 

  • The owner must submit an application with certain information, including, but not limited to, a sworn statement, under penalty of perjury, from the development’s general contractor, specifying the actual cost of the building materials and the amount of sales tax paid. 
  • The refund request must be submitted within 6 months after the eligible residential unit is deemed substantially completed or by November 1 after the property is first subject to assessment

Minimum Refund Threshold and Maximum Refund: a refund may not be granted unless the amount to be refunded exceeds $500.00, and a refund may not exceed the lesser of $5,000.00 or 97.5% of the Florida sales or use tax paid on the cost of the building materials per unit.

When is Refund Issued: The refund shall be issued within 30 days after the refund application is approved. This Sales Tax Refund only applies to sales of building materials that occur on or after July 1, 2023.   

If you would like additional information regarding the tax advantages available to affordable housing developments you may have under development or in planning, please contact us at livelocalact@bilzin.com.  

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