Tax abatement can be defined as a short-term elimination of increased real property taxes, characteristically provided as incentive for new growth or as a motivation for redevelopment. Such economic development tax abatement basically helps business and property owners to increase their capital investment which in turn enlarges the tax base, generates and keeps good paying jobs, and expands the local economy. In the USA, the Department of Community Development’s Division of Neighborhood Development administers the tax abatement program. This department is accountable for the administration of tax abatement for housing, homeowners and residential developers. It needs to be known that tax abatement does not come with 100% tax incentives. Further, it is to be noted that the swell in the assessed value because of the project will steadily phase over in one to ten year duration. Different states view tax abatements differently. The City of Indianapolis, for instance, views the granting of tax abatement as a public sector investment in the company. Read the rest of this entry »
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