State Tax Credits
Historic • Low Income Housing • Brownfields • Renewable Energy • Film Production/Motion Picture
Massachusetts Housing Development Incentive Program (HDIP)
About MA HDIP Credit:
The Massachusetts Housing Development Incentive Program (HDIP) is a crucial state initiative to foster economic growth and revitalize communities by promoting residential development in Gateway Cities. Since its inception, HDIP has been pivotal in transforming underused or unused properties into vibrant residential and mixed-use developments, enhancing local economies, and increasing housing stock.
MA HDIP Program Overview:
HDIP provides tax incentives to developers undertaking substantial rehabilitation or new construction of multi-unit residential projects that include market-rate units in designated Housing Development Zones within Gateway Cities. These incentives include a local option real estate tax exemption on increased property values resulting from improvements and state tax credits for qualified project expenditures.
Recent Legislation and Funding:
Reflecting the program’s success and the ongoing need for market-rate housing in urban areas, recent legislation has significantly increased the annual budget for HDIP. As of 2024, the program now boasts an enhanced budget of $30 million per year, up from the previous cap of $10 million. This increase is a testament to the program's efficacy and the state's commitment to expanding accessible housing options and stimulating economic development.
Impact and Achievements:
Since its establishment, HDIP has been instrumental in creating thousands of housing units across Massachusetts' Gateway Cities. This initiative meets the growing demand for housing and stimulates local economies by attracting new residents and businesses. The program has proven to be an effective tool in achieving the state’s goals of community revitalization and economic diversity.
Why Invest in HDIP?
Investing in HDIP projects is not just about building homes; it's about making a lasting impact. Developers and investors benefit from substantial tax credits and incentives, while communities enjoy the revitalization of their neighborhoods and the influx of new energy and economic opportunities. Join us in shaping the future of Massachusetts’ Gateway Cities.
Historic Tax Credit
One of the most recent successful rehabilitation tools has been the implementation of state historic tax credits. Too often because of a number of factors such as location, rental values, etc. , projects that even qualify for the federal rehabilitation tax credits are still not financially viable and require additional sources of funds. This led more then 30 states to adopt their own form of a historic tax credit. Due to the ability to monetize these credits they have become a catalyst to achieve project viability. Programs vary and some are more effective than others. Some programs have no state credit cap while others may have a state cap or per project cap.
In general, state historic tax credits vary from 10% of qualified costs to 25% of qualified costs. What qualifies varies state to state, but in general most follow the federal system and should be looked at carefully. Two of the most important characterizations for a successful state program is the ability to freely transfer the tax credit to a third party outside of the partnership and the ability to bifurcate the federal credit from the state credit. These two features are the main drivers for an efficient state program. TIF’s in-depth experience and knowledge in the state credit field has ensured that developers’ and investors’ expectations are met and assumptions are accurate early in the process.
Learn More about (LIHTC) Consulting Services
Learn More about The Massachusetts Housing Development Incentive Program (HDIP)
Brownfields Tax Credits
Some states, such as Massachusetts, offer brownfield remediation tax credits for the environmental remediation of certain sites. TIC has worked with developers during all stages of development to help recoup remediation costs through the monetization of state brownfield credits. TIC will assist developers prepare the appropriate application, meet with site professionals, work through the process with the necessary government officials and monetize the credit.
In 1998, Massachusetts passed the Brownfields Act to encourage the cleanup and redevelopment of contaminated property in Massachusetts. The Act provides liability relief and financial incentives to attract new investments in contaminated properties and ensure that the state’s environmental standards are met.
The Act protects certain owners and operators from liability once they meet Department of Environmental Protection (“DEP”) standards for hazardous material releases as long as they did not own or operate the property at the time of the release or cause the contamination on the property. The Act also protects owners and operators from liability for future violations and establishes covenant not to sue for if they meet certain statutory requirements.
Importantly, the Act provides financial incentives, including an access to capital program and tax credits for taxpayers that pursue remediation programs in accordance with Massachusetts law.
Renewable Energy Tax Credits
A number of states have adopted renewable energy state tax credits that address nearly all renewables. Most statutes provide tax credits eligible for the cost of equipment and associated design; construction costs; and installation costs by a taxpayer. Many programs are subject to various ceilings depending on sector and the type of renewable- energy system. Similar to other tax credits, the value of a credit investment is dependent on the strength of the sponsor, program efficiency and recapture risk. TIC works closely with project sponsors and professionals to identify the appropriate investor for the specific development.
Film Production and Motion Picture Tax Credits
Approximately 40 states have adopted film production tax credits as an economic development tool to lure film production companies to their state. Although state based on credit percentage and efficiency. With the reduction in debt and equity for film production, the production companies are dependent on the financing of the tax incentives. TIF, through its affiliate, Sakonnet Capital Partners, has bridged financed and monetized film tax incentives on a global level and is one of the leaders in the industry.
Rising Sun Mills - Providence, Rhode Island
