When you are investing in a Community Reinvestment Area in the City of Dayton, you can take advantage of Property Tax abatements for improvements to the property. Clearly, this helps Landlords, but it will also help flippers as the tax abatement stays with the property and benefits your buyer.
Most Residential Properties only need $5k or $10K in improvements to qualify for reduced taxes for 10 years.
And you may be able to combine this with the current Opportunity Zone incentives.
I can’t find the information on their site, so here is what I have. The information is current as of the date I posted it, but can and will change in the future.
Dayton Community Reinvestment Areas
Community Reinvestment Areas (CRAs) are designated areas within Dayton that have been authorized by Dayton and the State of Ohio to offer tax incentives. The purpose of the program is to encourage investment within a targeted area that will improve real property.
The property tax that is assessed due to improvements made to residential real property is reduced (exempted) by a predetermined percentage for a predetermined period of time. Commercial and industrial exemption percentages and terms are negotiated. Residential development projects that meet the area CRA requirements are eligible to apply for tax exemption. The terms and levels of exemption may vary. The tax paid by owners of real property is based on the current tax rate and the current appraised property value as determined by the Montgomery County Auditor’s Office http://www.mcrealestate.org/Main/Home.aspx.
Improvements to real property usually increase the property value and therefore increase your tax liability. If you own property located in a designated CRA and you make improvements that increase the value of your property, the tax may be calculated using the previous lower value of your property that existed prior to the improvements. Depending on the guidelines within the CRA district, your property tax liability resulting from the improvements may be substantially reduced for a specified time and amount.
The existing property tax and property tax value can fluctuate for reasons beyond the authority of a CRA district (i.e. rate increases, appreciation, levies, assessments for sidewalks, street lighting, etc.) The CRA program does not eliminate or reduce the tax or tax values of land or existing structures.
Industrial and commercial properties must submit a project application for consideration before any work begins. Potential applicants should contact Keith.Klein@daytonohio.gov 937-333-3812.
Below are the six steps required for participation in the residential CRA program.
- Contact the City of Dayton staff by email Scott.Adams@daytonohio.gov to determine if your property is located within a CRA, whether or not the improvements planned for the residential unit qualify for tax exemptions, and to request an application form. You may also contact Mr. Adams by telephone at 937-333-3911.
- Some items may not qualify for tax exemptions because they are considered maintenance items and therefore will not add value to your property. In these instances tax exemptions will not affect your tax liability and application to the program will afford no benefit to the property owner.
- If extensive renovation is required, contact staff as described above to discuss the scope of renovation before beginning your renovation. If you believe the present appraised value of your structure is overstated, contact the Montgomery County Auditor’s Office to request a new assessment of the value of the property before beginning your project.
- Apply for all permits required by the City, State, and other agencies. Some properties are located in Historic District areas and additionally require a Certificate of Appropriateness (COA); to determine if your property requires a COA contact Chedo Baker by email at Chidochashe.Baker@daytonohio.gov or by telephone at 937-333-3957. If the proper permissions are not obtained, your property will not be eligible for CRA tax exemptions.
- Within six (6) months after the completion of the improvements, submit the completed application with supporting documentation to the Building Inspection Division. You must submit copies of the appropriate permits required by the city, state, and other agencies. Staff will evaluate the application for completion and accuracy before being signed by the Housing Officer and forwarded to the Montgomery County Auditor’s Office.
- The Montgomery County Auditor’s office will review the application and make notations to your property tax record to indicate the City has certified your property for residential tax exemptions at the rate and term authorized under the CRA designation.
- Following the completion of the improvements, Montgomery County appraisers will determine the value of the improvements.
- If the property has been granted the tax exemption certification, the property tax due for the following year will continue to be calculated using the prior year’s appraised value as the basis. If the property has not been afforded tax exemptions under the designated CRA program, in the following year the property tax will be calculated using the new appraised value. Please note that the Montgomery County Auditor’s office will not notify you of any exemption: the exemption will appear on your tax bill. You may also find the exemption under the legal description for the parcel at http://www.mcrealestate.org/search/commonsearch.aspx?mode=address .
Here is the file with the general info posted above for easy printing
Here are the CRA areas and Abatement terms.
Here is the CRA Map I received from the City of Dayton.