Property Tax Abatement available for new homes & significant rehabs!

What is Property Tax Abatement?

Property tax abatement is the exemption of all or part of property taxes for a period of time. The abatement is only on a demonstrated increase in the taxable value of the property due to improvements, upgrades, and/or new construction.

How does Property Tax Abatement Work?

Ohio:
• Owners in approved areas can receive tax abatement for property improvements that increase the taxable value.
• Cities apply to have areas approved for tax abatement. These applications are reviewed and approved by the State Department of Development.
• Homeowners can apply for tax abatement anytime after the project is completed and receive some portion of the tax abatement. However, if you snooze, you lose. For example, if tax abatement is available for up to 5 years and you wait for 2 years after your project is completed to apply, you will only receive tax abatement for 3 of the 5 years.

Cuyahoga County:
• The amount you spend on an improvement is not necessarily equal to the increase in taxable value.
• The Cuyahoga County Auditor’s Office determines how much an improvement increases taxable value. For example, even though $80,000 was spent on improvements, the county may determine that the value only increased by $50,000.
• Improvements to existing home amenities and maintenance/upkeep i.e. new roof, kitchen remodels, bath remodels, etc. generally do not raise the taxable value in Cuyahoga County. (Therefore no tax abatement!)
• Adding new amenities such as a new porch, deck, addition, new bathroom, or finishing an unfinished basement/attic generally will increase the taxable value.  (Eligible for tax abatement!)

Shaker Heights:
• To be eligible for tax abatement, the property must be in one of the five approved areas and the project must have been completed after November 22, 2006 (when City approved program).
• Property taxes must be current and remain current for the term of the tax abatement.
• Home owners who apply are to be in compliance with housing related codes i.e. Housing, Building, Fire, & Zoning.
• New construction must be owner-occupied, single-family housing to be eligible for tax abatement.

Why is the City offering Tax Abatement?
• In the City’s Housing Preservation Plan, the City identified the need to develop new housing as a way of attracting new market niches, stimulating reinvestment in neighborhoods, and sparking catalytic change.
• Property tax abatement is a tool specifically created to enable cities to attract investment that would not otherwise have occurred.
• It is, therefore, a key tool in the City’s overall housing and neighborhood strategy, meeting the multiple goals of creating new housing products, strengthening existing neighborhoods, and building the tax base.

How do I Apply for Property Tax Abatement?
Below, we outline the eligibility requirements, how the property tax abatement program works, and how to apply. You can also contact us if you have questions.

See Frequently Asked Questions for even more details about the program and property tax abatement in general.

Eligible areas:
The City has 5 “Community Reinvestment Areas” approved by the State for property tax abatement.  See a map of the areas.

Terms & Eligibility:

Area	Property Types	Minimum Investment	Terms of Incentive
1. CRA "A"	Residential	$80,000 for rehabs (1-3 units) $200,000 for new single-family construction	75% for 8 Years 75% for 5 Years
2. CRA "B"	Residential	$80,000 for rehabs (1-3 units) $200,000 for new single-family construction	75% for 8 Years 75% for 5 Years
3. CRA "C"	Residential	$80,000 for rehabs (1-3 units)	75% for 8 Years
4. CRA "D"	Residential	$80,000 for rehabs (1-3 units) $200,000 for new single-family construction	75% for 8 Years 75% for 5 Years
5. CRA "E"	Residential	$80,000 for rehabs (1-3 units) $200,000 for new single-family construction	75% for 8 Years 75% for 5 Years

New Construction Guidelines:

The City is offering property tax abatement for new single-family homes in order to increase owner-occupancy, enhance housing options, and encourage high quality design and construction.

- 75% property tax abatement for up to 5 years.
- Only new single-family, owner-occupied houses are eligible.
- Minimum investment per house of $200,000 in construction costs.
- The property was a vacant lot for two or more years or previously had a single family home that was demolished but certified by the City or a lot that had been a two-family home*. 

*Demolitions of single-family homes must be certified BEFORE starting your project! The City will certify if properties are structurally unsound, fire damaged, etc. The intent is to discourage the demolition of Shaker’s beautiful and intact single-family homes.

Home Rehab Guidelines:

The City is offering property tax abatement for existing homes to encourage significant, gut rehabs and transformative improvements. The goal it is to expand housing options in the City, strengthen the City’s neighborhoods, and increase the tax base.

- 75% property tax abatement on the increased value for up to 8 years.
- Single and two-family houses are eligible.
- Owner-occupancy not required for home rehabs.
- Minimum investment of $80,000.

To apply:
1. Download the application
2. Submit the completed application & attachments to the City’s Housing Officer:

Mr. James Ziegler
City of Shaker Heights Housing Officer
Building Department
3400 Lee Road
Shaker Heights, OH  44120

Phone:  216-491-1460
Fax:      216-491-1465
E-mail:  james.ziegler@shakeronline.com

3. The City will review your application to make sure if meets eligibility requirements and submit it to the Cuyahoga County Auditor’s Office for approval.
4. You will receive an approval from the County Auditor’s Office in 2-4 weeks.

Frequently Asked Questions:

Property Tax Abatement 101

1. What is property tax abatement?
2. How does property tax abatement work?
3. How do I benefit as a resident from property tax abatement
4. For more information:
5. Why has the City chosen property tax abatement?

Property Tax Abatement and Your Home

1. What types of improvements qualify for tax abatement?
2. Will my kitchen or bath remodel qualify for property tax abatement?
3. How is the amount of tax abatement that a property receives determined?
4. If I made improvements to my property last year, do they qualify for property tax abatement?
5. Should I be concerned about living in a tax abatement district (Community Reinvestment Area)?

Property Tax Abatement and Your Community

1. Are other cities using property tax abatement?
2. Has the City used property tax abatement before?
3. How long will the program be offered?
4. Will the property tax abatement for the 5 approved areas be available for only residential properties or commercial properties too?
5. Why did the City designate more than one Community Reinvestment Area?
6. How will property tax abatement affect our schools?