From: Mike Smith, Licking County Auditor

Can property tax increase when a property is abated?

Many taxpayers believe property taxes cease to be collected once a property is approved for a tax abatement. However, the opposite is true when it comes to revenue – it actually increases.

Property tax abatements are probably the most popular and prevalent way to attract business to any county. Abatements only apply to the improvements built on the land. Land will increase in value due to the amount paid for the land, added utilities, etc. With all headlines and discussions surrounding Intel, many taxpayers believe it’s a pure giveaway of our tax dollars. This is not the case. If you look at property tax generation on a parcel that has been through the abatement approval process, you’ll find that the amount of property tax revenue generated after the property is abated and developed generates more tax dollars than prior to the abatement.

An example would be a parcel in New Albany, which did not change in physical size (for time comparison). In 2018, the parcel was on CAUV (a commercially farmed piece of land) and generated $346 annually in property tax. The parcel then received a property tax abatement for commercial development. Completed commercial construction on the property was finalized in 2020, with $65,951 paid in property tax for the 2021 tax year.  In addition, an annual special assessment ($54,269 for the 2021 tax year) is paid to the Community Authority to repay the costs of infrastructure improvements, including roads and utilities.

While the term “abatement” may have a negative connotation in the mind of some taxpayers, it generally has a very positive outcome for property tax generation.