If you live in the city of Cincinnati and are considering renovating your home there is good news for you. The City of Cincinnati Department of Community Development has implemented both a residential and commercial tax abatement program to help attract new residents, businesses, and investors and encourage current residents, businesses, investors to improve their current properties. Any property owner may be eligible for this property tax abatement if they purchase a newly constructed home or are renovating their current home. Residential is defined as a single family home or any building with 1-3 units. With this tax abatement program, the commercial category is defined as residential multi-family property containing more than 4 units, office, retail, industrial, or mixed use.

Who Qualifies for the Residential Tax Abatement?

The way this program works is that certain types of improvements that actually add value to the home will qualify, while others will not. Part of the application process helps to determine if the improvements that you are making to the home are simply improving the condition of the home versus actually adding value. Painting your home, replacing your roof, new siding, new windows, new gutters, improved landscaping, a retaining wall, or resealing a driveway will all improve the condition and salability of your home but do not add dollar value. While adding a pool, deck, patio, or more usable square footage or living space to the home will add dollar value to your property and will qualify for the tax abatement. LEED- certified remodeled or newly constructed residential property is eligible for an additional tax exemption based on the certification level. Please click here for more information on LEED homes. The period for tax abatement begins with the date of documented completion of work.

Tax Abatement Limits

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 original value for a period of ten years. So that would mean that the property owner’s taxes would remain at the assessed value of the $75,000 price but the house would actually be worth $100,000 if the owner were to have the home re-appraised. The portion of the tax by which the remodeling increased the value of the structure may be abated up to a maximum $275,000 market value.

Total Investment Eligible for Exemption (fair market value): $275,000
Assessed Value/Taxable Value is 35% of fair market value: $96,250
Assessed Value Multiplied by Tax Rate (.05694): $5,480.48
10% Rollback: $548.05
Estimated tax abated for one year: $4,932.43

For an application for the Residential CRA Tax Abatement Program, please click here.