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Residents and commercial business owners can finally take advantage of a tax advantage pursued by the city for the past three years.
Mayor Rodney Metz announced state officials informed him in a letter received Monday the city’s request for a Community Reinvestment Act (CRA) tax incentive area was approved. Residents and businesses can now take advantage of the tax credit which was approved by the state on Jan. 24.
“The Community Reinvestment Act tax incentive will give us another tool in the economic development tool box,” Metz told the Wapakoneta Daily News after Monday’s Wapakoneta City Council meeting. “This will help the property owners out who have made improvements to their residence or their commercial business as well as new commercial businesses and industries with their properties.”
Metz explained property owners throughout Wapakoneta are eligible for the CRA tax incentive and the tax incentive can provide a credit for up to 10 years.
The CRA permits tax abatements for improvements made to existing commercial, industrial and residential properties as well as new commercial and industrial property investments. The abatement would not affect property taxes collected at present, it would only abate the possible increased tax amount that could be collected because the property’s assessed value increased.
For example, a property owner with a $100,000 house makes $20,000 in improvements. They would be responsible for paying property taxes on the original $100,000, they would not be responsible for paying taxes on the increased value of the home or $20,000 more in the valuation of the home.
Metz said this incentive helps property owners who want to make improvements to an older residence without being required to pay increased taxes on the property. He hopes this encourages property owners to update and improve properties in the city, which improves the aesthetics of the building and the safety of the structure.
It also reduces the chance the building will become a blight on the city.
The incentive does not apply to new home construction.
The incentive also applies to commercial and industrial properties. The mayor said some commercial business owners have expressed some interest in the tax incentive.
Councilors passed an ordinance in June to seek state approval of the city as a CRA. The idea started with former Council President Don Jump, the Wapakoneta Area Chamber of Commerce, the Wapakoneta Area Economic Development Council and the Downtown Wapakoneta Partnership in 2009.
With state approval, Metz noted the next step is to get information regarding the program into the hands of property owners.
“I am sure we will be some education and information dissemination on the program,” Metz said. “We will get something on the city’s website and obviously we will use the local newspaper.”