How Do I Secure A Real Estate Tax Abatement?

A Tax Abatement Is One Of The Most Important Incentives Available

A real estate tax abatement is one of the most valuable incentives that you can receive. Offered by communities to spur new development and investment, abatements freeze property taxes at pre-improvement values. This lowers the cost of building and occupying new development for you, and, in the long run, increases the community’s tax base.

Tax Abatement Basics

Not every project qualifies for an abatement. Typically, the community will offer them in targeted areas to spur development. In areas where they are available, developers, owners or tenants have to make an application to the appropriate government agency, outlining the details of the proposed project. Usually, the project has to be relatively significant — doing some TI work won’t qualify. Abatements are usually granted for completely new construction on vacant land, demolitions for new construction or gutting and rehabilitating existing buildings.

Once the abatement is granted, the city freezes the property’s tax-assessed value at its value prior to any work being done. If you build a completely new building on an almost-worthless brownfield site, you’ll pay taxes on the value of the site, and all of your site improvements and the building will be completely tax-free. Most tax abatements last from five to 10 years, although the City of St. Louis can extend your abatement. Some projects qualify for a 10 year full abatement and for 15 years of an additional 50 percent abatement.

Qualifying for an Abatement

If you aren’t experienced in working with the city, qualifying for a tax abatement can be challenging. You will need to file an application with the Urban Redevelopment Corporation overseeing the area in which you want to build or do other work and receive an abatement on it. Furthermore, you’ll need to get the support of the city Alderman that oversees the area so that he can sponsor an ordinance to give that redevelopment corporation the ability to abate your taxes.

The process is streamlined in areas that have already been designated as a blighted area in need of redevelopment. However, if you’re seeking a tax abatement in an area that is not yet recognized as blighted, your application will be subject to a review of the area. If the city doesn’t consider the area to be adequately challenged, your application could be denied.

Clark Properties Tax Abatement Services

Clark Properties has extensive experience with the tax abatement process in and around the St. Louis metropolitan area. For example, our Union Seventy Center project received a tax abatement from the city. Our team of experienced developers and property experts has the know how and the in-place relationships to help your business apply for, and receive, tax abatements. If you have a project under consideration, we can file your application for you, represent you in front of the city government, and take your abatement from an application to an approval, potentially saving your business or your tenants millions of dollars in property tax liabilities. Please contact us to learn more about how we can help you.