Property taxes represent a major expense for most homeowners, typically amounting to 1% to 3% of the home’s value each year.The recurring expense doesn’t go away when you pay off your mortgage. It’s a perpetual cost of homeownership. Some cities or communities offer what’s known as property tax abatement. This unique benefit can provide homebuyers with significant savings, allowing them to buy more home for the same price, or improve their chances of qualifying for a mortgage by putting a home’s total monthly payment within reach. As an added bonus, property tax abatement can improve resale or market value for as long as the abatement is in effect.
How Tax Abatement Programs Work
Tax abatement programs reduce or eliminate the amount of property tax that homeowners pay on new construction for a specified amount of time. They won’t completely eliminate your property tax bill—you’ll still have to pay taxes on the value of the property before it was improved. But the savings can be substantial. For example, Petros Homes has a tax abatement program that is in effect at their new townhome community in Fairlawn, Ohio. Buyers at Eighteen Riviera could save about $420 a month—or about $5000 a year—for a total savings of $75,000 over 15 years. Without abatement, they would be paying over $500.00 per month on property taxes for a total of $6000.00 per year. As many buyers roll the property taxes into their monthly mortgage payment, and with the abatement substantially reducing their monthly investment, it rewards the buyer with more “buying” power and enables them to qualify for more.
Properties often must remain owner-occupied to continue qualifying for the tax abatement. If the property is sold from one owner occupant to another, the tax abatement will remain with the home, again, which is a valuable benefit to pass on to the buyer. The abatement period does not start over when the property changes hands, however. If the seller has received seven years of abated property taxes, the new buyer will enjoy the tax savings for the remainder of the 15- year term.
Eighteen Riviera, built exclusively by Petros Homes, is a brand new collection of townhomes located in highly sought-after Fairlawn, Ohio. Eighteen Riviera offers an exceptional quality of life with a fine selection of two-level townhomes that offer both 1st and 2nd floor Master suite options with the outstanding benefit of a 15-year tax abatement.
