What is a tax abatement and how do I qualify for one?

A tax abatement is a tool used by local government to attract private investment and job creation by exempting all or a portion of the new or increased assessed value resulting from new investment from the property tax roll. A tax abatement can be granted on either real or personal property.

By the Indiana State statute, tax abatements can be granted for between one to 10 years. Only in year one is the total amount of new assessed value exempt from paying property tax. In each succeeding year, the share of the previously exempted assessed value that is taxable increases. In most cases, the granting of a tax abatement will reduce the amount of property taxes paid by the owner by approximately 50 percent over the full abatement period.

Tax abatements in each instance are allowable only within the city's corporate limits in areas designated as Economic Revitalization Areas established in accordance with the Indiana State statute. Applications are reviewed primarily on new job creation or job retention, economic impact, location and investment amount, though other economic factors are considered. A tax abatement application, including a Statement of Benefits form, must be submitted prior to filing for building permits or the purchase of new equipment. Please contact our office prior to filling out the application to discuss your eligibility and qualification.

If the tax abatement application meets all statutory requirements and suitably meets the local criteria, staff will prepare a preliminary resolution recommending approval by the City Council. A final or confirmatory hearing is usually held within 30 days of the preliminary or declaratory resolution.

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