What's all the confusion about tax abatement?Questions are always asked about tax abatment. People have different ideas. We've even heard of buyer's agent's who advised clients that Abatement means "No Taxes". YIKES!!
The principal behind tax abatement is that the building is in drastic need of repair. In blighted areas, if someone is willing to do the right thing and make the necessary repairs, the building will be taxed at the same rate as prior to the improvements. This is of course, the theory only.
Important points to consider:
Downtown St. Louis is no longer considered a blighted area.
There are only 2 buildings under abatment that are new construction.
The majority of abated lofts and condos are re-sales.
Abatement is temporary. Taxes were previously reduced for a 10 year, transferable period.
Currently new construction in other neighborhoods in the city is being offered for 5 year periods. It is getting more and more difficult to qualify for this reduction in taxes.
By comparison, taxes in Missouri aren't bad. A friend in the metro east pays over twice my property tax bill for the same valued home. Abated taxes can be just a fraction of our already reasonable tax rates. Never in my experience though, has the abatment meant total elimination of taxes. That's just not reality.
2 comments:
Hi - since your blog has become my guide for buying a loft in the city ( printer lofts ) I am wondering if you know about dog friendly parks in the downtown area !?
Thanks, Karen
I can attest to this myth of tax abatement meaning 'no taxes'. I come across clients all the time that ask me about 'those tax free properties'. It is sometimes difficult to explain. But it's still better than hearing, 'how come I can get a 1.79% rate on the internet and you're offering 6.5%?!'
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