The Cincinnati Tax Abatement is Changing! Here’s What You Need to Know

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. 
    • Tax Abatement Terms and Caps are CHANGING – You can review these by clicking here, but you’ll notice that each of the categories for new construction has gone down. There are also new incentives based on Historic Renovations, Visibility and renovations in general.
    • 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.

 

We know this motion and policy is NOT set in stone, but it’s important to keep an eye on these changes. We’re lucky to call Paul Yankie of Green Building Consulting a friend, so we’re one call away from understanding where these changes stand. And if you’re considering building or renovation, we encourage you to give his firm or any of the other LEED building consultants in town a call.  

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.

Want Even More In Depth Information?  Visit the City of Cincinnati Site here

CONTACT US TO LEARN MORE ABOUT BUILDING IN THE CITY OF CINCINNATI

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Cincinnati Tax Abatement – Explained!

Cincinnati Tax Abatements… Explained!

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:

  1. 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.
  2. 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!
  3. 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!
Tax Savings Calculator Here

Want Even More In Depth Information?  Visit the City of Cincinnati Site here

CONTACT US TO MEET WITH A TAX ABATEMENT EXPERT!

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Wasson Way Trail Ground Breaking!

Wasson Way Trail Ground Breaking!

Good news for anyone living on the East Side: The Wasson Way Trail has broken ground on it’s first phase and is well on it’s way to being a reality! As a former resident of Oakley (just feet from the trail), I am seconding guessing my decision to leave. This trail will be a fantastic addition to an already awesome community… at least I’m only a few miles away!

What is Wasson Way, you might ask? Wasson Way is a 7.6 mile trail that will go through 10 Cincinnati neighborhoods. It will connect the I-71 area near Oakley and Norwood with the 78 mile long Loveland Bike Trail.  The first phase has broken ground near Madison Road and Rookwood Commons, and the second phase follows along Wasson Road; hence, the name!

As you may know, this project has been in the works for a number of years.  Supporters have been working tirelessly on Wasson Way by lobbying to purchase the necessary property  in conjunction with the City of Cincinnati.

Now, you may have to wait until 2020 to get all the way to the Loveland Bike Trail and be on your way to Xenia. The first phase may be underway, but a project like this tends to take a while to approve, fund and build the entire path. Hopefully, we’ll all get to see this become a reality in just a few short years!

Sources: http://wassonway.org/

How Does Cincinnati’s Tax Abatement Work?

How Does Cincinnati’s Tax Abatement Work?

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.  Unless you’ve been living under a rock, of course.

But, do you really know how it works??

Here’s a little crash course on the tax abatement and why it’s been such a driving force in the Cincinnati residential real estate market…
As you may know, when you build, add-on or invest in your home, your property taxes can and, most often, WILL go up!  This is obviously true in the City of Cincinnati  as other municipalities, but there is a special little incentive for those looking to invest in the City (all 52 neighborhoods).  The Cincinnati Community Reinvestment Area (CRA) Residential Tax Abatement, as it’s called, offers property owners the ability to minimize their tax implications.  This means that any improvements will NOT significantly add to your property tax bill.  You would only pay on the amount of “pre-improvement” value, up to certain levels.
Let’s give a few examples:
 
Example 1: You purchase a home or lot in Walnut Hills.  The value of that existing property is $100,000.  If you then build a $400,000 Leed Gold Certified Dwelling (we’ll get into the LEED certification below) on the property, you would only be taxed on the $100,000 for 15 Years. The remaining $400,000 would be abated for those years thus saving you around $8,000 per year!
 
Example 2: You own a home in Oakley assessed at around $250,000 and have decided to add on to the back of the home.  The renovation will cost $150,000.  That entire amount would be tax abated for 10 year.  It’s only 10 years as opposed to the 15 year new construction abatement because of the regulations.  This still saves you almost $3,000 a year for 10 years.  That’s almost $30,000 in savings!
 
So, how do you do this? First off, you’ll want to call a professional (a builder or us at Build Cincinnati) that understands the tax abatement and construction process.  You determine what the best plan of action is for your house or lot and then review the abatement guidelines at the link below.  Once construction is complete (and have an audit from a LEED professional if you did a LEED Home), you’d need to submit your application to the City with the necessary documentation, which includes an improvement spreadsheet, Certificate of Occupancy, LEED audit and a few other miscellaneous documents.
 
 
Now, the secret sauce: LEED Certification.  The City of Cincinnati is one of the BEST places to build a LEED certified home because it saves you even more money.  If you look at the link above, you’ll see that this energy certification has tiered savings based on the certificate level.  As you’ll see,  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 cost, but that’s specific to the home you build and how much money you can spend! Be sure to choose a builder (Shameless Plug ALERT…like Classic Living Homes, Walker Homes, Ashford Homes, Quest Homes, Legendary Homes) that’s knowledgable on the process because this will prove invaluable.  Also, an excellent resource on the subject is the Green Building Consulting in OTR.  They have spearheaded the LEED process for many of our client’s homes.
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!
For more information on the Tax Abatement, feel free to reach out to our Build Cincinnati team members at 513-686-7676.