The goal in the measure approved by Trotwood City Council last month is to ease the tax burden for residents who reinvest in homes in the city, said Chad Downing, Trotwood Community Improvement Corp. executive director.
The program was previously offered to industrial and commercial developers, Downing said. Residents have one year from the time the work is done to apply for the program, making all tornado victims eligible, he added.
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“We don’t want them to be burdened by the increase in taxes,” Downing said
Trotwood City Manager Quincy Pope called the change, “another tool designed to stimulate revitalization, attract new residents and galvanize development.”
In the first year, those approved for the program would receive 100 percent abatement on the improved value as determined by the Montgomery County auditor’s office, city records show. For the second year, that would decrease to 75 percent, and drop to 50 percent for both the third and fourth years, records show.
Certain home projects — such as a kitchen remodel — would see no benefit from the program, Downing said. How much tax savings particular projects would receive is sometimes difficult to explain, he added.
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“It’s not the amount of money you put into the property,” Downing said. “It’s the amount of money that the auditor (determines) with their valuation after the work is completed.”
New home builders would see the most benefit from the program, according to Downing.
For example, a new construction home valued at $150,000 by the auditor would have a taxable value of $52,000, he said. This would result in an annual tax of roughly $5,400, plus the baseline taxes of the vacant lot. With the city’s program, this would result in an abatement of about $5,400 in the first year, about $4,100 abatement in the second year, and about $2,700 in both the third and fourth years.
This would result in a total abatement of nearly $15,000 over four years, according to the city.
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When an owner renovates a property, a home last valued at $150,000 that undergoes upgrades to increase the valuation to $160,000 would translate into a jump in the taxable value of $3,500, he said. That would result in an additional $364 of taxes on the property each year, Downing added.
Under this scenario, owners would realize a $364 abatement in the first year, $273 in the second year, and $182 in both the third and fourth years. This would result in a total of an about $1,000 abatement over four years, according to the city.
Information about the program is available online at trotwood.org. However, because of the nuances of the program, Trotwood officials ask that residents interested in the program call the city first to better address their specific situation.
Downing can be reached at 937-854-7214, or by email cdowning@trotwoodcic.org.
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TAX BREAKS
Trotwood’s expanded property tax abatement program now includes residents. Qualified applicants would get the following tax breaks, based on improved values decided by the Montgomery County Auditor’s Office:
•Year 1: 100%
•Year 2: 75%
•Year 3: 50%
•Year 4: 50%
SOURCE: City of Trotwood.
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