City of Cincinnati - Property Tax Abatement for Green Buildings

Summary

The City of Cincinnati offers property tax abatements for residential and commercial buildings constructed or renovated to meet LEED certification standards. The original green building tax abatement ordinance was passed in 2006 and has been amended four times since, culminating in the current abatement rules clarifications passed December 19, 2012. The incentive is available for any building within city limits and does not require a demonstration of financial need. The residential designation applies to structures with up to three units and residential condominiums, while residential structures with four or more units are classified as commercial buildings. Industrial structures are also eligible to receive incentives under the commercial program. An agreement must be executed with the Department of Community Development before construction begins. The tax abatement rules for buildings that received permits on or before January 31, 2013 are as follows:

Residential Buildings

• 100% property tax abatement for 15 years (new construction) or 10 years (existing building retrofits) up to $562,792
• Market value limit increases by 3% each year
• No value limitation for structures that achieve LEED Platinum certification
• Minimum investment of $2,500 for one- and two-unit structures (new construction or rehab) and a minimum investment of $5,000 for 3-unit structures is required.

Commercial and Industrial

• 100% tax abatement (before payment in lieu of taxes) for 15 years (new construction) or 12 years (existing building renovations)
• No cap on the value of improvements
• Requires an agreement signed prior to the start of construction that must be approved by the City Council
• Owner must enter into an agreement with the local Board of Education district to pay the board an amount equal to 25% of the avoided property taxes, effectively making the tax abatement 75%.
• Application fee of $750 to the State of Ohio, plus an annual fee amounting to 1% of the value of the tax abatement with a minimum of $500 and a maximum of $2,500.

Tax abatements for buildings that received permits after January 31, 2013 are as follows:

Residential Buildings

• 100% property tax abatement for 15 years (new construction) or 10 years (existing building retrofits) up to $275,000 for Non-LEED certified and LEED-certified buildings; $400,000 for LEED Silver buildings; and $562,000 for LEED Gold buildings
• No value limitation for structures that achieve LEED Platinum certification
• Minimum investment of $2,500 for one- and two-unit structures (new construction or rehab) and a minimum investment of $5,000 for 3-unit structures is required.

Commercial and Industrial

• 100% tax abatement (before payment in lieu of taxes) for 8-15 years; see below chart
• No cap on the value of improvements, except multi-unit (4 or more) residential buildings are limited to $275,000 per dwelling unit
• Requires an agreement signed prior to the start of construction that must be approved by the City Council
• Owner must enter into an agreement with the local Board of Education district to pay the board an amount equal to 25% of the avoided property taxes, effectively making the tax abatement 75%.
• Application fee of $750 to the State of Ohio, plus an annual fee amounting to 1% of the value of the tax abatement with a minimum of $500 and a maximum of $2,500.
• Additional provisions apply to commercial buildings using Community Reinvestment Area LEED abatements.

The duration of the commercial tax abatement varies by certification level and type of building and improvements, per the chart below: