What is Tax Abatement?
Tax abatement programs are prevalent in many areas, including Cincinnati, to provide financial incentives in the form of tax exemptions which reduce property taxes. In Cincinnati, this incentive is tied to the level of LEED certifications for new and remodeled homes, allowing homeowners to pay taxes only on the pre-improved value, or land value for a new home, of their property for up to 15 years. The simple goal is intended to benefit the City by incentivizing individuals to build high-quality sustainable homes in Cincinnati. With the construction of these homes, the City enjoys a number of direct and indirect benefits from this investment including:
- Increased future tax base
- Positive impact to the local economy & sales tax base
- An increase in land values
Tax Abatement changes on LEED Certified Homes
Longer tax abatement periods and higher maximum abatements may be achieved for properties that meet Leadership in Energy and Environmental Design (LEED) standards. Since LEED homes benefit both homebuyers and the environment, Redknot has focused on creating homes with these guidelines in mind. Take a look at the charts below for a better understanding of how LEED certifications can affect tax abatements in Cincinnati. See highlighted the current amounts and durations compared to the amended for LEED Certified, new construction homes.
New Construction Chart Prior to January 1st, 2022
| LEED Level/Qualification | Cap | Term (Years) |
| Non LEED Certified | $275,000 | 10 |
| Visitable | $275,000 | 12 |
| LEED Certified | $275,000 | 12 |
| Leed Certified & Visitable | $275,000 | 14 |
| LEED Silver | $400,000 | 15 |
| LEED Gold LBC Net Zero | $562,000 | 15 |
| LEED Platinum / LBC Full Cert | No Limit | 15 |
New Construction Chart Post January 1st, 2022
| LEED Level Qualification | Cap | Term (Years) |
| Non LEED Certified | $200,000 | 10 |
| LEED Certified | $200,000 | 12 |
| LEED Silver | $400,000 | 15 |
| LEED Gold LBC Net Zero | $500,000 | 15 |
| LEED Platinum / LBC Full Cert | $650,000 | 15 |
| Bonus Criteria (Can be added to any tier) | Additional Cap Increase | |
| Visitability | $100,000 | |
Summary of ALL Tax abatement amendments
- Elimination of the Uncapped (No Maximum) Incentive
- Decreases in almost all New Construction categories except for Visitable projects.
- Increases in almost all Remodel categories except for the uncapped top tier.
- Simplification of Incentive by eliminating unnecessary and ineffective tiers.
- First time in the CRA's history that Remodel/Restoration is given a greater incentive than New Construction to help curb the teardown concern in some neighborhoods.
- Creates appropriate gaps between tiers to match homeowner’s decision criteria used to determine how much additional investment they will make in their home.
- Adds Visitability & Historic Building Bonuses that focuses investment on additional City Priorities without cannibalizing the currently incentivized priority of efficient and healthy housing for all.
- 4 Unit buildings are now eligible in the Residential Program with Condos,1,2 & 3 unit buildings.
- Helps close an inequity “loophole” that allowed and even incentivized homes in the most underserved communities to be constructed in a manner that passed higher energy, water and maintenance costs on to those homeowners. This, while motivating the healthiest and most cost-efficient homes to be built in the most “market ready” neighborhoods.
For more information on the City of Cincinnati tax abatement program (aka Community Reinvestment Area), please visit https://choosecincy.com/resources/communities/.
Tax Abatement Calculator
Use our tax abatement calculator to find out what you could save in property taxes by building a LEED certified home in the city of Cincinnati. This calculator assumes a 2.58% tax rate, a 4% interest rate, and a 30-year loan. Tax rates vary slightly depending on location, this calculator is for illustration purposes only. Adjust the land value and structure cost to equal your total project spend. Adjust the LEED Tax Abatement to the level you wish to certify at: Silver, Gold, or Platinum. This calculator assumes current rates and abatement levels.
For assistance with the calculator or a building project, please Contact Us.
Benefits of Residential Tax Abatement
Save Money
The money saved via property tax reductions is significant making it the biggest benefit for homeowners. This is done by lowering development costs for homeownership resulting in either cost savings or more square footage with higher-end finishes in your original budget. Here at Redknot Homes, we can help to maximize this incentive with our building processes.
Improves Resale Value
A current tax abatement can increase the resale value since the abatement transfers with the sale of your home.
Increases your Return on Investment
Abatement eligible neighborhoods consistently experience tremendous growth at much larger and quicker rates, making your property more valuable in the process.
Energy Cost Savings
LEED certified means “Leadership in Energy & Environmental Design” which benefits the homeowner in energy cost savings from building efficiencies.
Community Revitalization
Attracting and retaining city residents in turn stimulates community revitalization causing a ripple effect of benefits for the homeowner and the city, including:
- Beautification. The place where you call ‘home’ is better cared for and has an improved appearance.
- Increased economic growth! A city where people reside is a city of booming local businesses that they depend on.
Expert City Home Builders at Redknot
Redknot is an expert at following these very detailed processes to ensure the LEED certified requirements are met to capture this incentive! In fact, Redknot has never missed a LEED certification target meaning that every new homeowner has enjoyed the full tax abatement that they desired.
Not only are we experts at crafting the strongest LEED certified building processes for your home, we also have a large selection of lot options to consider that are in tax abatement eligible neighborhoods. City building is our niche, we know the ropes and handle all of the complex details below of building an eco-friendly, tax abated home for you and take pride in being the best at it!
- LEED certification - Silver, Gold, Platinum
- Abatement process with the city
- Mandatory inspections to qualify
- Filling out all of the tax abatement paperwork with the city
You can focus on building the unique custom home of your dreams in our beautiful city, while also deciding how you’ll spend all that extra money you’ll be saving on property taxes!
If you are looking for a new home with potential tax abatement benefits, then contact us today to start your search.