Residential Property Tax Abatements: Are you Overpaying your Property Taxes?
It is no secret that tax incentives are commonly offered to businesses in exchange for job creation and community development. It is lesser known, however, that tax incentives serving a similar purpose are also offered to owners of residential property. Community Reinvestment Areas, or "CRAs," are designated areas within municipalities or unincorporated county areas that local governments designate as neighborhoods containing housing facilities or structures of historical significance and where "new construction" is discouraged. The underlying goal of establishing a CRA is to revitalize, rehabilitate, and remodel existing structures within the boundary of the CRA. Ohio currently has over 400 cities, townships, and villages with established CRAs.
CRA boundaries are typically drawn around older neighborhoods of historical importance that will benefit greatly from homeowner investment and revitalization. To incentivize investment and attract and retain home owners to these areas, many local governments offer property tax abatements for newly remodeled homes and improvements made to existing structures. Property owners seeking abatement can apply for the exemption based on a percentage of the assessed value of new structures, or based on the increased assessed valuation that results from remodeling existing structures. The abatement can be up to 100% of the value of these improvements and is typically effective for 10 to 15 years, which can equate to very large tax savings on extensive property renovations.
CRA boundary maps can be found online on municipality or county websites. If you live in one of these areas, a portion of your property's value may qualify for property tax abatement. For more information about residential property tax abatements, please contact Jason Walker, Steve Hall, or any other professional at Zaino Hall & Farrin.