The Cincinnati Tax Abatement is CHANGING! Learn More Here
On September 2nd, City Council passed a motion to change the policy to the current Tax Abatement also known as the Community Reinvestment Areas. The tax abatement allows residents and businesses to have a portion of their property taxes abated based on the improved value of their investment into a specific property. Essentially, if you renovate or build a home in the City of Cincinnati, you have the opportunity to pay less in taxes if you follow certain criteria.
Quick disclosure as we get started, this blog post is not meant to give you a step by step guide how to have your taxes abated nor is it the end of your fact finding on changes. I am a real estate agent that focuses on New Construction in Cincinnati, but not an attorney, consultant or expert on the tax abatement policies. I say this to make sure you understand that expert guidance may still be needed if you are making investments or decisions to which the tax abatement may impact..
Anyways, back to the information…the original goal of the tax abatement and the CRA (Community Reinvestment Areas) is to remain intact. If you read through the City’s tax abatement information, you’ll see that the original goal of the CRA was to: 1) stimulate community revitalization, 2) retain City residents, 3) attract homeowners, and 4) reduce development costs of home-ownership and rental projects. To find out more, click here to review the City’s website on the current tax abatement.
Fast forward to today, City Council under Vice Mayor Smitherman has empowered “The Property Tax Working Group” at the end of 2018 was set up to investigate the effects of the CRA and see how they can improve upon it. These are the results of thousands of hours of review by that group and recommendations from a number of parties.
In regards to the suggested changes, which may soon become a reality, here’s what you need to know.
Four Families may be moving from the Commercial tax abatement requirements to residential, which is highly favorable for owners of multi-families.
Visibility – This is a term you might not know yet, but soon will. By increasing threshold widths, creating zero step entries, and adding “visitable paths”, you may be able to increase your abated value by $100,000. This can only be done at the planning stage, during design, and could save you around $2500/year. For more information on visibility, click here (https://docplayer.net/42823090-City-of-cincinnati-visitability-standards.html)
Tiered Approach Under Consideration – On the final policy change, you may see something along the lines of a tiered neighborhood approach. We’ve heard that they plan to continue to engage in an extensive study to review this option.
Grandfathering – USGBC and the HBA are talking through the provisions for grandfathering properties to the old Tax Abatement Rules that are in some phase of development. This is still TBD and being discussed, but will most likely be a part of the new ordinance.
TALK TO YOUR CONSULTANT – It’s more important than ever to talk to your consultant, especially Green Building Consulting, who has been at the forefront of these changes.
Disclosure: Since this information is changing on a daily basis, please consult the City of Cincinnati, a LEED Consultant and/or your builder before you act on any of this information. We can not guarantee any of this for accuracy as it’s based on our interpretation of the Property Tax Working Group and Home Builders Association information.
Cincinnati has been voted one of the best places to live in the United States, and while that may be not surprise to us lifelong residents, we want to make sure new visitors and transfers understand just how great our City is! Of course we love our sports teams, unique restaurants, and the wide array of things to do, but our personal favorite is the affordable housing market.
So, please take a quick look at all the reasons we love the Queen City and head on over to our PROPERTY SEARCH to browse our selection of homes currently on the market to purchase. You know you love Cincinnati as much as we do… is it time to set new roots in your favorite neighborhood?
The housing market is hot, and while that may be great news for those listing their homes, for buyers, the frustration is real. Week after week, house after house, they’ve grown accustomed to the phrase…”we’re now in multiple offers.” A great looking, well-cared-for and most importantly, well-priced house, is creating quite the frenzy for those out searching for their next home in this low inventory seller’s market.
When demand outweighs supply, there are a few things you can do to get ahead in this competitive market:
FIND A WELL QUALIFIED BUYER’S AGENT: Along with obtaining a strong financing pre-approval, this is the first step in getting closer to the home of your dreams. Ideally, you want an agent who has dealt with multiple offer situations before and knows several strategies to help you win. Overall, it can come down to what you’re willing to pay. As a buyer’s agent, I would never encourage a client to overpay for a home, but I can offer advice to help get you to the “right” price.
MAKE A STRONG INITIAL OFFER: Yes, we’re starting with the $$$. In most cases, this is what it comes down to. Sellers usually want the best possible price they can get for their home. Still, it doesn’t mean the highest offer will always be the winning offer. Along with the purchase price written in the contract, you can also consider asking your agent to include an escalation. This is an addendum to the contract stating that you will pay a set amount over the highest written offer up to the limit you set.
HAVE YOUR AGENT ASK ABOUT THE SELLER’S NEEDS: Is there an occupancy time that would work best for them? Do they need a quick close? Ultimately, the offer that best fits the needs of the seller is the offer that will win.
CONSIDER WAIVING CONTINGENCIES OR KEEP TIME FRAMES SHORT: While I can’t recommend skipping an inspection, some buyers are waiving the inspection as a contingency and accepting the house “as is.” The same goes for the appraisal. There is a concern when a house sells far over listing price that might not appraise. In a multiple offer situation, the buyer could offer to pay the difference between the appraisal value and the purchase price should the appraisal come in lower.If you don’t want to waive the contingencies all together, it can be a good idea to keep the inspection and settlement period as short as reasonably possible
DON’T ASK FOR EXTRAS: A multiple offer situation is not the time to throw in a lot of extras like closing costs, a home warranty or appliances or furniture. It’s best to keep the contract as clean as possible.
GET A PLUG FROM YOUR LENDER: Have your mortgage person CALL the agent to tell them how well qualified you are. Even if they just leave a message it can help.
GIVE IT YOUR BEST EFFORT: As mentioned before, having a strong pre-approval to back your offer can help the seller feel much more confident in your ability to purchase their home. You can also add to the amount of earnest money you would normally offer to show a strong interest and commitment to following through with your offer. If possible, consider a cash offer. While cash isn’t always king, it does make for a very compelling offer and a streamlined purchase process that can be hard to top.
STAY CALM: It can be easier said than done, but the best advice I can give to my clients is to present the strongest offer they can to help get the house they want at a reasonable price that falls within their budget. While it can be difficult to remaIN unemotional about these decisions, you have to keep it in perspective. Offering more than you’re comfortable with paying or forgoing important contingencies can lead to regret down the road.
Build Collective is Here to Help Home Buyers Every Step of the Process
If you’ve been living in the City of Cincinnati, chances are you’ve heard about the tax abatement for new construction and remodeled homes. But, do you really know how it works??
Paul Yankie, President & CEO of Green Building Consulting sat down with us to give us a little crash course on the tax abatement & LEED Construction and why it’s been such a driving force in the Cincinnati residential real estate market.
Paul explains it best in our chat with him, but here are the main takeaways:
The Cincinnati Community Reinvestment Area (CRA) Residential Tax Abatement, as it’s called, offers property owners the ability to minimize tax implications when you build, add-on or invest in your home. This means that any improvements will NOT significantly add to the property tax bill. You would only pay on the amount of “pre-improvement” value, up to $275,000.
LEED Certification: This is the secret topping to the tax abatement. Basically, LEED Building = Green Building = Energy Efficiency.The City of Cincinnati is one of the BEST places to build a LEED certified home because it saves you even more money. The higher the rating, the more money you save. LEED Silver allows for up to $400,000 abated, LEED Gold is up to $562,000 and LEED Platinum is UNLIMITED. Of course, LEED comes with it’s extra building costs, but that’s specific to the home you build and how much money you can spend!
Find a professional (a builder or Build Collective or Green Building Consulting) that understands the tax abatement and construction process. They can help you determine what the best plan of action is for you.
Now that you’re armed with this information, doesn’t building and remodeling in the City sound that much better? Not only can you design a home specifically for you and your family, but you can save money in the process!
See How Much Money You Can Save on A New Home with Our Tax Abatement Calculator!
Tune in to see how we’re working with our buyers and sellers during COVID-19. Mike Hines (Build Collective) joins Tim O’Brien (Zipfel Capital) and Dan Orner (First Title) on the latest procedures when it comes to home buying and selling to keep you safe and informed.
As the top real estate team in Montgomery, Ohio, we are committed to keeping you well informed so you can always make the best decisions for you and your family.
Call Us With Questions
Have more questions? Need to sell or buy a home soon but don’t know where to start during these ever changing times? Please reach out to us! Mike Hines is available to chat or email at anytime…. 513.260.0424 or [email protected]
Empty Nester. Lifestyle Living. Moving Down. Right Sizing…What best describes what you and what you’re looking for?
Like it or not, these are all just fancy marketing names for all you baby boomers looking for a new home to fit your new lifestyle. Whatever you or they call it, you’re just ready to shed the home that you raised your kids in for something more your current style
So what’s important to you in a new home? One misconception that we always hear from non empty-nesters (like their kids!) is often that this move is ONLY about one floor living so you can get around easier now or in the future. Don’t get us wrong, we know this is a big part of it, but we know that’s not the only driver! The fact is that you are looking for a location to capitalize on this new found freedom. We’ve helped dozens of empty nester buyers looking for a new home and most often, the number one drive in their search is location because they want to be surrounded by things to do. Restaurants, walking trails, shopping, etc. so they can take advantage of the time they used to spend on their kids. This might not be in every case, but we’re seeing it more often than not!
Happy smiling family relaxing in autumn park
Of course, in addition to location, we know that you’ll be thinking about things like:
Function Living Spaces – One floor potentially or maybe a future elevator
No or Low Maintenance – Lock it and Leave it!
Close to your kids: Lets face it, we might need you guys more than ever!
NOW, HOW DO YOU FIND IT?
Even though you have the exact idea of what you might want, finding it is a different story! The search can be difficult because of the lack of options and inventory. That’s often why people come to us because of our less conventional ways to go about the search!
In fact, to make it a bit easier on you, we’ve outlined a few tips on how to go about your search:
Most Buyers start off searching for Existing Homes because it’s the path of least resistance. It would be ideal to find a ranch style home with one floor living, minimal steps and that’s fixed up enough that you won’t have to do much to it. However, you’ll see that the inventory of homes like this is slim. Take Montgomery for example. Of the 51 single family home listings in Montgomery, only 7 are ranches, and of those 7, only 3 are existing homes.
TOWNHOMES & CONDOS:
Condo living is fantastic! You can lock it and leave it since there’s NO maintenance. In areas like Montgomery, Blue Ash, Oakley, Hyde Park, there are quite a few new condo developments (and existing ones) to choose from. For instance, the Allora on Madison is an excellent example of a new community that has been a magnet for empty nester buyers. With low HOA fees, elevator options and located smack dab in the heart of Oakley, this development literally checks ALL boxes!
As you look as these options though, there’s a few key items to consider:
HOA fees – These can range monthly from $100 to well over $600 so keep an eye on what they cost and what’s included!
Functionality and size of your floor plan – If you’re coming from a larger single family home think about the culture shock of going from 4000 ft to 2000 ft.
In addition to the Allora, here’s a few links to some other options that are available now:
We wouldn’t be called Build Collective if we didn’t mention at least a couple of new construction options! Take for example Orchard Trail in Montgomery. Designed for lifestyle living, this community caters to the empty nester crowd by designing ranch homes, an all inclusive HOA and maintenance fee and plenty of room for outdoor entertaining without the burden of taking care of more than you need.
Things to keep in mind:
Cost Per Square Foot – Ranches tend to be more expensive because all or most of the living is on the first floor!
Lot Width – This is the most important feature to consider if you’re looking at lots!
Timing – Make sure you have adequate time to build, which can take anywhere from 6-10 months nowadays with the tight labor market
Montgomery – 10432 Radabaugh – (This lot is tremendously wide & perfect for a ranch!)
Whichever option you choose, try to think through the transition and location. It’s also key to keeping an open mind. Sometimes the best options never cross your mind until they’re right in front of you!
And, as you search, we’re hear to help. Having a good agent on your side is pivotal as they can find ferret out options for you and make your purchase MUCH smoother.
Download Our Guide to Moving Down to help you as well!
Making the decision to buy or sell a home can be an overwhelming. The team at Build Collective, Coldwell Banker West Shell can help you understand the process and make sure you get the most for your home in the shortest amount of time. Contact us at 513.686.7676 to get your new home journey started!