The Affordable Housing Incentives Act proposes to amend the Internal Revenue Code of 1986, allowing property owners to defer capital gains taxes when selling real property for affordable housing purposes. This is achieved by treating such sales as an involuntary conversion , enabling sellers to avoid immediate taxation if they reinvest the proceeds into similar property. To qualify for this tax benefit, the property must be sold to a qualified housing operator , which includes government entities, tribal housing organizations, community development organizations, or other entities dedicated to affordable housing. Crucially, the property must be subject to a binding legal covenant ensuring its use as affordable housing for a 30-year period , meeting specific criteria for residential rental property or homeless shelters. Additional requirements include notifying the Treasury Department of the sale within 90 days, with the Treasury then responsible for auditing compliance with the affordability covenant every five years. Furthermore, the sale price of the property must not exceed the amount determined by a qualified appraisal , ensuring fair market value. This legislation seeks to stimulate the development of affordable housing by providing a significant tax incentive to property sellers.