PROGRAM: The City of Cincinnati Department of Community Development’s Community Reinvestment Area Residential Tax Abatement Program encourages rehabilitation and new construction of structures through property tax incentives. Property tax abatement is available for any increased valuation that results from the improvements to the property for both new construction and renovation. Condominiums and one, two, or three unit residential structures within the City of Cincinnati are eligible for the residential tax abatement. For multi-units that are 4 units or greater, mixed-use buildings, commercial, and industrial structures, see Commercial Tax Abatement Program.
PROGRAM GOAL: Stimulate community revitalization, retain City residents, attract homeowners to the City of Cincinnati, and to reduce development costs for homeownership and rental projects.
TYPE OF ASSISTANCE: Real Estate Tax Abatement. Tax abatement is the temporary elimination of increased real property taxes.
INCENTIVES: Owners pay less property tax. Savings may be used for other purposes. Green designs reduce energy costs.
BENEFITS: The program provides a benefit for residents who improve their homes and encourages home shoppers to buy in the City of Cincinnati. The tax abatement benefits stay with the property the entire length of the abatement and will transfer to any new property owner within that period.
MAXIMUM AMOUNT:
New Construction:
The new construction abatement term is 10 years, 100% abatement up to $283,250 market value. This amount increases 3% at the start of each year (January 1). Tax must be paid on land. For example, new construction of structures containing a condominium or a one, two, or three unit residential structure is eligible for a 10-year abatement up to a maximum $283,250 market value. Tax is paid only on the land and the value above $283,250. The following is an example of the estimated tax savings:
- Total Investment Eligible for Abatement (fair market value): $283,250
- Assessed Value/Taxable Value is 35% of fair market value: $99,137.50
- Assessed Value Multiplied by Tax Rate (.05694): $5,644.89
- 10% Rollback: $564.45
- Estimated tax abated for one year: $5,080.44
Renovation:
The renovation abatement is 100% of the property’s increased value, up to a market value of $283,250 for a 10-year term (the market value limit increases by 3% compounded each year). Minimum costs are $2,500 for one and two unit structures and $5,000 for three unit structures. Rehabbed condominiums, one, two, and three unit dwellings qualify as well as condominium conversions. Tax must be paid on land.
For example, if the owner of a $75,000 home makes $25,000 in improvements, the owner is only responsible for taxes based on the home's value prior to improvements for a period of 10 years. The portion of the tax by which the remodeling increased the value of the structure may be abated up to a maximum $283,250 market value. It should be noted that some types of remodeling do not increase value. Improvements to the house itself, garage, in-ground pool, decks and patios qualify for abatement. Roofing, vinyl siding, windows, gutters, and painting may improve the condition of the house, however, may not increase the value of the property. Landscaping, retaining walls, driveways and the like do not qualify for the abatement.
ELIGIBILITY: Real property must be within the City of Cincinnati. Any improvement for making a building more structurally sound, more habitable, or for improving the structure is eligible. Eligible uses include renovation or new construction of one, two, or three unit residences, or condominium conversions or rehabbed condominiums.
LEED PROJECTS: The Residential Tax Abatement Program offers property tax incentives to encourage new construction and rehabilitation of residential properties that meet Leadership in Energy and Environmental Design (LEED) Certified, Silver, Gold, or Platinum standards.
New LEED construction of one, two, and three unit residential structures, including condominiums, are eligible for a 15-year 100% tax abatement valued up to $515,000. For renovated LEED residential dwellings (condominiums, one, two, and three unit structures), there is a 10-year tax abatement on improvements up to a maximum $515,000 market value. Owners will pay tax on the land. The market value limit will increase by 3% compounded each year. There is no maximum value limit for new and rehabilitated residential structures certified with the LEED Platinum. Additional information regarding the LEED standards can be found on the United States Green Building Council website.
APPROVAL: All one, two, or three unit structures within the City of Cincinnati, new construction or rehab, are entitled to the tax abatement. The Hamilton County Auditor's Office determines the abatement amount based on the type of improvements. A letter from the Hamilton County Auditor's Office will be received after the Auditor's appraisal has been completed. The period for tax abatement begins with the date of documented completion of work. An increase or decrease in taxes during the abatement period may result when voted changes in tax rates, state-mandated reappraisals, or updates reflecting neighborhood trends are adopted.
Residential Tax Abatement Application
For more information, contact the Department of Community Development at (513) 352-6146 or communitydevelopment@cincinnati-oh.gov.
