PROPERTY TAX PHASE-IN (ABATEMENT) IN
KOSCIUSKO COUNTY, INDIANA
Property Tax Abatement
Local communities/counties may offer real and personal property tax abatement as an incentive to new and expanding businesses. Property tax abatement allows a property owner to phase in payment of property taxes over a designated period. This period may be any number of years between one and ten. This phase-in differs from the “automatic” tax phase-in (abatement) program of three years. For consideration of the longer phase-in program, applications must be made to the local governing jurisdiction for their consideration, including a public hearing and other steps required by state statute.
Property tax abatement in Indiana is authorized under Indiana Code 6-1.1-12.1 in the form of deductions from assessed valuation. Any property owner in a locally designated Economic Revitalization Area (ERA) who makes improvements to real property or installs new manufacturing machinery and equipment and/or R&D equipment may apply for property tax abatement.
Real Property Tax Abatement
- Eligibility:
New buildings constructed are eligible for real property tax abatement. Substantial improvements to existing buildings may be eligible, but it is important to note that only the value of the improvement to the existing building qualifies. It is not permissible to abate property that is already being taxed in Indiana. By State law land does not qualify for abatement.
- How to Calculate:
Real property tax abatement is a declining percentage of the increase in assessed value of the improvement based on one of the following ten time periods. For example, for a seven-year abatement, the taxpayer pays no tax in year one, 15% of the total tax in year two, 29% of the total tax in year three, etc. The local governing body determines the time period for the abatement.
Term of the Abatement |
||||||||||
1 |
2 Years |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
|
YR 1 |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
YR 2 |
50% |
66% |
75% |
80% |
85% |
85% |
88% |
88% |
95% |
|
YR 3 |
33% |
50% |
60% |
66% |
71% |
75% |
77% |
80% |
||
YR 4 |
25% |
40% |
50% |
57% |
63% |
66% |
65% |
|||
YR 5 |
20% |
34% |
43% |
50% |
55% |
50% |
||||
YR 6 |
17% |
29% |
38% |
44% |
40% |
|||||
YR 7 |
14% |
25% |
33% |
30% |
||||||
YR 8 |
13% |
22% |
20% |
|||||||
YR 9 |
11% |
10% |
||||||||
YR 10 |
||||||||||
Personal Property Tax Abatement
- Eligibility:
Manufacturing or research & development equipment that is new to Indiana is eligible for personal property tax abatement. It is not permissible to abate property that is already being taxed in Indiana.
- How to Calculate:
Personal property tax abatement is a declining percentage of the assessed value of the newly installed manufacturing and/or research and development equipment. Taxes are phased in as described below.
Term of the Abatement |
||||||||||
1 |
2 Years |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
|
YR 1 |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
YR 2 |
50% |
66% |
75% |
80% |
85% |
85% |
88% |
88% |
90% |
|
YR 3 |
33% |
50% |
60% |
66% |
71% |
75% |
77% |
80% |
||
YR 4 |
25% |
40% |
50% |
57% |
63% |
66% |
70% |
|||
YR 5 |
20% |
34% |
43% |
50% |
55% |
60% |
||||
YR 6 |
17% |
29% |
38% |
44% |
50% |
|||||
YR 7 |
14% |
25% |
33% |
40% |
||||||
YR 8 |
13% |
22% |
30% |
|||||||
YR 9 |
11% |
20% |
||||||||
YR 10 |
10% |
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