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New Tax Exemption Available for Property Development

1.23.17

New Tax Exemption Available for Property Development

“New Tax Exemption Available for Property Development ” by John Valle, CPA, MTax | Senior Manager – TaxJohn Valle head shot

On December 8, 2016, the Ohio approved Senate Bill 235 (SB 235) which allows an exemption from property tax for commercial or industrial newly “developable or redevelopment property”.

Who Qualifies

In order to qualify for this tax exemption, the property under development must not yet have a certificate of occupancy issued for it, and the parcel of real property must have no current commercial, agricultural, or industrial operations being conducted on it.

In addition, there must be plans for either:

  1. The construction of one or more commercial or industrial buildings or structures on the parcel (newly developable property)
  2. The construction or reconstruction of new commercial or industrial buildings or structures on the parcel, so long as there are or were one or more commercial or industrial buildings or structures on the parcel (redevelopment property).

The tax exemption does not apply if any portion of the commercial or industrial building will be used as a dwelling.

On Dec. 8, 2016, SB 235 was approved which allows a property tax exemption for commercial or industrial newly “developable or redevelopment property".

Application Procedure and Maintenance of Tax Exemption

To obtain the exemption, the owner of the qualifying property must first submit an application to the proper county. Once the application is received, the county must approve the exemption. If approved, any increase in assessed value associated with the parcel beginning with the tax year specified in the legislation is exempt from taxation for a period of up to six years.

The exemption may prematurely cease for a variety of reasons, including:

  1. obtaining a certificate of occupancy for a commercial or industrial building or structure on the property
  2. transferring title to the property to another person
  3. A change in zoning regulation that no longer permits the construction of a new commercial or industrial building or structure on the parcel
  4. The performance of any commercial, agricultural, or industrial operations on the property.

Have plans for development or redevelopment project in the near future? Contact your trusted advisor at Apple Growth Partners, or me, for more information on whether your company can qualify for this property tax savings opportunity.

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