What is a Tax abatement for real estate?
Real Estate Tax Abatement is a development tool designed to assist developers, businesses, and individuals with renovation and new construction projects.
Tax Abatement freezes the tax assessment in improvements to property at the pre-development level.
To be eligible for tax abatement, a significant investment must be made in the property; generally either new construction on vacant land or gut rehabilitation of an existing building.
Application must be made before construction begins.
Often the term for tax abatement is 5 to 10 years.
Mortgage payments that include PITI- Principal, Interest, Taxes and Insurance can significantly reduce monthly mortgage amounts when a tax abatement is in place reducing the monthly payments several hundred of dollars per month.