Tax abatement is the temporary elimination of increased real property valuation taxes on the improvement to real property (Land). On a residential structure the County Auditor has the property values broken into two valuations; land and building. These two valuations actually represent the breakdown of the total property value the County Auditor places on that Parcel. The portion of the parcel that represents the building valuation is the amount that is used for tax abatement purposes. The land valuation on the parcel is not exempt from paying its full share of property taxes.
Tax abatement is generally offered as a stimulus for new developments or as an incentive for redevelopment. The Residential Tax Abatement Program was created as a tool for potential/existing developers and homebuyers that can be used to reduce their monthly expenses by restricting real estate tax obligations.