Tax Increment Financing

Tax Increment Financing (TIF) involves real property tax exemption granted with respect to the increment of increase in assessed valuation of certain designated parcels resulting from real property improvements made to such parcels.

TIF Incentives

• The property owners of the designated parcels make payments in lieu of taxes, equal to the amount of taxes that would otherwise have been paid with respect to the exempted real property improvements. As a result, implementation of tax increment financing creates a “cash flow” back to the public body.
• There can be a maximum of 10 years of real property exemption, and maximum of 75% exemption, unless school board approval is obtained for a higher rate or longer term.

Who is Eligible?

Basic Requirements for an incentive district:

• An area of not more than 300 acres
• The area must have a continuous boundary