Calculation of Tax Abatement

 

 

There are two types of tax abatement, real property tax abatement and personal property tax abatement.

Real Property Tax Abatement

 

New buildings constructed are eligible for real property tax abatement. Substantial improvements to existing buildings may be eligible, but it is important to note that only the value of the improvement to the existing building qualifies. It is not permissible to abate property that is already being taxed in Indiana. By state law, land does not qualify for abatement.

 

How to Calculate:

 

Real property tax abatement is a declining percentage of the increase in assessed value of the improvement based on one year of the following ten time periods. For example, for a seven-year abatement, the taxpayer pays no tax in year one, 15% of the total tax in year two, 29% of the total in year three, etc. The County Council determines the time period for the abatement.

Personal Property Tax Abatement

 

Manufacturing equipment, research and development equipment, logistical distribution, equipment, or information technology equipment that is new to Indiana is eligible for personal property tax abatement. It is not permitted to abate property that is already being taxed in Indiana.

 

How to Calculate:

 

Personal property tax abatement is a declining percentage of the assessed value of the newly installed manufacturing equipment, research and development equipment, logistical distribution equipment, and/or information technology equipment. Taxes are phased in as described below. The County Council determines the time period for the abatement.