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Changes to the Tax Abatement Program
Effective January 1, 2024, the City of Cleveland's Updated Residential Tax Abatement program is operating in accordance with Ordinance 482-2022.
For projects to be grandfathered under the previous tax abatement program, project teams must have submitted a complete schematic application to the Planning Department and a part-one tax abatement application on or before December 31, 2023. Detailed information on the changes incurred on this program from Ordinance 482-2022 can be found below in the section "Program Overview". If you are interested in learning whether or not your project may qualify for the tax abatement program, please click the below link to schedule a pre-development consultation.
Program Overview
The City of Cleveland offers tax abatement as an incentive to help encourage and spur investment across all of its neighborhoods. This program is available to both homeowners and developers. To be eligible:
- All rehabilitation or new construction work must be completed under a valid and accurate permit issued by the City of Cleveland Department of Building and Housing.
- The City of Cleveland will not accept applications for improperly permitted improvements. Examples of improperly permitted improvements include work completed under a permit that does not accurately reflect the actual cost of the work or work completed outside the scope of the work described on the building permit.
- For new Construction and whole-house rehabilitation, the permit must require a Certificate of Occupancy.
- The property must be in the City of Cleveland limits.
- Work performed must comply with the City of Cleveland Green Building Standard.
Abatement and affordable set-aside criteria depend on the project and Community Reinvestment Area. Abatement value for single-family projects can range from 85% to 100% of the enhanced value, up to $350,000 for new construction and $450,000 for rehabilitation. For Multi-family projects, abatement will vary between 85% and 100% and all projects must set aside units affordable to families making 100% of the Area Median Income based on the applicable CRA. The 2024 Tax Abatement Program Chart shows maximum abatement values and other program features.
All projects may be eligible for a 100% abatement if all units in the project are affordable to families making 100% or less of the Area median income. Multi-family applicants must demonstrate their ability to build and maintain affordable homes. The applicant may submit a legal document binding 100% of the units to an affordability criteria consistent or greater than the aforementioned standard with their Part II application. Every three years during the affordability period, all projects will be audited and reviewed. Tax Abatement recipients must present rent rolls, audited financial accounts, and tenant income verification documentation.
Multi-family projects with an abated value of more than $250,000 or a Total Development Cost greater than $20,000,000 may need a Community Benefits Agreement.
The Cuyahoga County Fiscal Office determines the abatement amount based on the type of improvements. Timing of the abatement term is dependent on the time that the permitted improvement(s) to the dwelling create a new taxable value, according to County records. Taxes may increase or decrease during the abatement period when voted changes in tax rates, state-mandated reappraisals, or updates reflecting neighborhood trends take effect.
The property owner will be responsible for paying property taxes based on the assessed value of the land and the building(s) before improvements.
Aging-In-Place
For Single-Family projects, 100% abatement may be granted for meeting the City of Cleveland's Age-In-Place Criteria. Eligible projects may consist of three or fewer units. Upon completion of the project and final approval, abatement will be granted for 15 years at an amount up to $450,000 per unit.
Developers and homeowners must submit architectural plans to Carol Madison, Tax Abatement Manager cmadison@clevelandohio.gov and Johnnie Warren, Housing Inspector jwarren@clevelandohio.gov for review prior to commencing the project. Upon completion of the project, the Tax Abatement Office will review all submitted materials for completeness and require an on-site inspection prior to granting final approval.
Applicant Must Select a Compliance Method
- 2020 Enterprise Green Communities Criteria
- National Green Building Standard (NGBS) Certification
- LEED (Silver) Certification
Each method relies on a roster of independent third-party professionals known as Green Raters or Verifiers. They assist and confirm that the project meets the standards for that method. The resident or developer must hire a third-party professional from the appropriate roster in the project's planning stages. This will ensure that the project can be certified as eligible for tax abatement by complying with the requirements of the selected method and the Cleveland Green Building Standard.
NOTE: Removal of dilapidated sheds and garages will result in those items being removed from the tax duplicate. For clarification on all matters dealing with real estate taxes, contact the Office of the Cuyahoga County Auditor at 216.443.7100
Application Submission
To submit your application please use the hyperlinks listed below. Upon completion of your application, you will receive an email with detailed instructions on how to upload supporting documentation to your application.
Single and Two-Family Residential Tax Abatement Application
Multi-Family (3+ Units) Residential Tax Abatement Application
Required Attachments:
For Single-Family applications you will need to submit:
- An itemized scope of work or invoice for the work performed on the property.
- Building permits that show the true and accurate description and cost of all work completed. This must show a paid $60 fee and a requirement of a Certificate of Occupancy
- Evidence of the Engagement of a Green Communities Verifier
- Evidence that the project has met the Cleveland Green Building Standard
For Multi-Family applications, you will need to apply in 2 phases.
Part 1 application submission, the following documentation is required:
- Itemized Sources and Uses
- Projected rents with and without tax abatement, including a statement of owner’s debt and utility coverage for the project as applied in each scenario.
- Residential per unit construction pro forma: For mixed-use projects provide both the residential and the commercial pro format. Be certain all construction expenses are shown per residential unit.
- Project Description: Provide a detailed description of the project, including essential elements of the development (limit to one page). For rehabilitation projects, provide an itemized scope of work or other documentation describing the rehabilitation work to be completed.
- Green Building Plan: Attach a preliminary copy of a green building development plan, including any preliminary checklists associated with the selected path.
- Applicant Description: Describe the history and mission of the applicant/organization. Describe the experience and expertise of the organization, and list any consultant or partner organizations that will be involved in the implementation of the project(limit to one page).
Part 2 application submissions, the following items must be attached:
- Third-party certifications and all relevant attachments that demonstrate that the Cleveland Green Building Standard has been met.
- All applicable building permits.
- Certificate of Occupancy evidencing completion of all residential units in the project.
- Documentation of any changes from the project’s original Part 1 application submission.
- If your project involves the rehabilitation of a building with historical or architectural significance, applicable documentation of the appropriateness of the rehabilitation work.
Selection and Award
Complete Tax Abatement applications are processed in the order they are received. Depending on season and volume, processing time may vary. If an applicant's submission is incomplete, processing time restarts until all application materials' full and final requests are met. All requests with incomplete application packets older than 60 days will be rejected.
To ensure timely processing, all tax abatement applications must be submitted to the City of Cleveland by November 1st of the year following the year in which the building permit was issued. For example, if a building permit was issued in March 2024, the tax abatement application must be submitted to the City of Cleveland on or before November 1, 2025. For further information, contact Carol Madison at 216-664-3442 or by email: cmadison@clevelandohio.gov.
Improvements that DO NOT increase the assessed value of a residential property
| Exterior Residential Improvements |
|---|
| New roof installation, aluminum siding installation, siding repair, storm window/door installation, adding windows/doors, repair/replace/add shutters, install awnings, add/replace gutters/downspouts, repoint/repair/replace masonry, add window boxes, repair/replace porches/steps, install outdoor lighting, install sprinkling system, plant lawns/shrubs/grass/plants, scrape/paint house, install/repair/replace sidewalks |
| Interior Residential Improvements |
|---|
| Remodel kitchen, add closets, paint/wallpaper/redecorate, resurface floors, resurface ceilings/walls, Repair plaster, install window blinds, add built-in bookcases, add built-in cabinets, replace furnace with the same kind, replace hot water heater, replace oil or gas burner, replace hot water heater, replace plumbing, rewire completely, add electrical circuits/outlets, install/replace light fixtures |
Note: normal repairs and maintenance will not increase the real estate tax assessment
Improvements which DO increase the assessed value of residential property:
- Add additional living area
- Gut and renovate a home or apartment building
- Convert all or part of a non-residential building to a residential use
- Install new additional bathroom or toilet
- Add new porch
- Install stall shower
- Finish attic, second floor or bedroom with paneling, plaster, or plasterboard
- Build new or enlarged garage
Cleveland Tax Abatement Study Available
In the summer of 2019, the City of Cleveland’s Office of Community Development and the Equitable Community Development Working Group engaged with the Reinvestment Fund, PFM, Greater Ohio Policy Center, Neighborhood Connections, and Leverage Point Development to study the City’s residential tax abatement program. The study was commissioned to understand the historical usage of the program, the value generated for the city, and identify potential adjustments that would help the city advance an Equitable Community Development Strategy.