A submetering administrative fee is outside gross rent only if it is computed uniformly and does not exceed $5 per month for all the unit's submetered utilities

lihtc.ua.submetering_administrative_fee_excluded_from_gross_rent_up_to_five_dollars · v1.0.0

A fee charged to a unit's tenants for administering an actual-consumption submetering arrangement is not gross rent for section 42(g)(2) purposes -- but only on two conditions. First, the fee must be computed in the same manner for every unit receiving the same submetered utility service. Second, the exclusion does not reach any amount by which the AGGREGATE monthly fee for all of the unit's utilities under one or more submetering arrangements exceeds the greater of five dollars per month, an amount designated by publication in the Internal Revenue Bulletin, or the lesser of a dollar amount specifically prescribed under State or local law and a maximum amount designated in the Bulletin. The cap is aggregate and per unit, so three submetered utilities at $2 each breach it. Any excess is gross rent and counts against the rent limit.

Confidence

high

Effective from

2016-03-03

Last reviewed

2026-08-31