Tax Abatements and More:
Incentive in Action
The City of Cleveland is quite invested in bringing residents into the City limits to live, work and play. In an effort to help neighborhoods offer a greater diversity of affordable, updated housing stock, the city has put together an incentive program to make buying a home in Cleveland a very attractive option. A main component of the incentive package is tax abatement.
Tax Abatement is the temporary elimination of increased real estate taxes for potential and existing developers and homeowners. Tax Abatement is offered as a means of stimulating new development and redevelopment, and it is working to bring new residents and breathe new life into Cleveland neighborhoods.
- New construction of single-family homes.
- New construction of multifamily investor-owned properties (developer's tax savings are passed on to tenants in the form of lower rent)
- Conversion of nonresidential buildings to residential units.
- Rehabilitation of multifamily (three of more units) structures , including historic buildings
- Improvements of one- and two-family homes that cost more than $2,500 and would result in an increase in assessed value for real estate taxes.
Source: City of Cleveland, Department of Community Development
How Much and How Long
One- or two-family dwellings:
- Single/two-family (new construction) -100 percent for 15 years
- Single/two-family (rehab) -100 percent for 10 years
Source:City of Cleveland, Department of Community Development
Tax Abatement Primer:Program Facts
The City of Cleveland offers residential tax abatement on newly constructed and rehabilitated homes throughout its 36 neighborhoods. Currently, a newly constructed home in Cleveland receives 100 percent, 15-year tax abatement for construction of the home, but owners are still liable for the increase in value of the land. Rehabilitated properties receive a 100 percent, 10-year abatement on the increased value of their property after the work has been completed.
- Beginning January 1, 2009, all projects seeking public funding and incentives shall meet the requirements set forth by the "Cleveland Green Standard," plus provide evidence the project achieves 35 discretionary points. For more information visit http://cd.city.cleveland.oh.us or click here.
- Beginning January 1, 2010, to qualify for residential tax abatement under Cleveland's CRA program, all new construction and rehabilitation projects will need to meet Energy Star Standards. For more information visit http://cd.city.cleveland.oh.us or click here.
See the table for a sample of tax savings for newly constructed single-family homes with and without abatement.
|Home Price||Average Annual Tax Responsibility without Abatement||Average Annual Tax Responsibility with Abatement||Average Savings|
|$150,000||$2,970||$594||$2,376, or $198/mo.|
|$300,000||$5,940||$1,188||$4,752, or $396/mo.|
|$500,000||$9,900||$1,980||$7,920, or $660/mo.|
All values are approximate and are based on Cuyahoga County's 2008 residential tax rate of 1.98 percent.
Land Bank Lots: Buildable lots are available at deep discounted prices, which currently average $100, from the City of Cleveland.
Second Mortgage Assistance: The City of Cleveland funds a second mortgage deferred loan program for new or rehabbed houses. This program offers up to $10,000 in the form of a deferred mortgage that assists with affordability. The loan is made at a zero percent interest rate for a 30-year term. The loan is due and payable to the City upon the lease, sale, transfer, cessation of occupancy, or refinance of the mortgaged property during the loan term.
Mortgage Financing Options: Numerous financial institutions that lend in the City of Cleveland work to make homeownership a reality for everyone. Incentives range from no to low down payment requirements, low interest rates, and discounted closing costs.
Home Repair Programs: The City of Cleveland and various nonprofit organizations offer low-interest home repair and improvement loans to assist Cleveland Residents. Interest rates range from 0 percent to 6 percent, with many programs having no income restrictions.
For more information please contact:
|City of Cleveland||(216) 664-2045|
|Cleveland Action to Support Housing||(216) 621-7350|
|Cleveland Restoration Society||(216) 426-1000|
|Neighborhood Housing Services of Greater Cleveland||(216) 458-4663|