Q We need to repaint some of the low-income units at our tax credit site. To accomplish this, we must temporarily displace residents—that is, have residents move out of their units—for a few days. Will the owner of our site stay entitled to claim credits for these units while their residents are displaced?

A Yes. If you displace residents for a few days to repaint their units, these units are still in service. So the owner stays entitled to claim its credits. If, instead, you needed to displace residents for a few months—for example, to gut their units’ kitchens—then your units would be out of service because they wouldn’t be suitable for occupancy.

The tax credit law bars owners from claiming credits for units that aren’t suitable for occupancy. Your site’s low-income units must be continuously suitable for occupancy in accordance with state or local codes in order for low-income housing tax credits to be claimed. If any low-income unit at an LIHTC project isn’t suitable for occupancy, the site may become ineligible for continued tax credits, the amount of the tax credit could be reduced, or previously allowed tax credits could be recaptured.