Tax Incentives Specialist
Office of Strategic Business Investments
The Ohio Community Reinvestment Area program is an economic development tool administered by municipal and county government that provides real property tax exemptions for property owners who renovate existing or construct new buildings. Community Reinvestment Areas are areas of land in which property owners can receive tax incentives for investing in real property improvements. The program is delineated into two distinct categories, those created prior to July 1994 ("pre-1994") and those created after the law changes went into effect after July 1994.
The Community Reinvestment Area (CRA) Program is a direct incentive tax exemption program benefiting property owners who renovate existing or construct new buildings. This program permits municipalities or counties to designate areas where investment has been discouraged as a CRA to encourage revitalization of the existing housing stock and the development of new structures.
Local municipalities or counties can determine the type of development to be supported by the CRA Program by specifying the eligibility of residential, commercial and/or industrial projects.
|Exemption Levels||Pre-July 1, 1994 CRA||Post-July 1, 1994 CRA|
|Real Property||Must be 100%||Up to 100%**|
**The exemption percentage and term for commercial and industrial projects are to be negotiated on a project specific basis. If the proposed exemption exceeds 50%, local school district consent is required unless the legislative authority determines, for each year of the proposed exemption, that at least 50% of the amount of the taxes estimated that would have been charged on the improvements if the exemption had not taken place will be made up by other taxes or payments available to the school district. Upon notice of a project that does not meet this standard, the board of education may approve the project even though the new revenues do not equal at least 50% of the projected taxes prior to the exemption.
|Term Exemptions||Pre-July 1, 1994 CRA||Post-July 1, 1994 CRA|
|Residential Remodeling (2 units or less; minimum $2500)||Up to 10 years as specified in the legislation that creates the CRA||Up to 10 years as specified in the legislation that creates the CRA|
|Residential Remodeling (more than 2 units; minimum $5000)||Up to 12 years as specified in the legislation that creates the CRA||Up to 12 years as specified in the legislation that creates the CRA|
|Residential New Construction||Up to 15 years as specified in the legislation that creates the CRA||Up to 15 years as specified in the legislation that creates the CRA|
|Commercial and Industrial Remodeling (minimum $5000)||Up to 12 years as specified in the legislation that creates the CRA||Up to 12 years as negotiated and approved in an CRA Agreement|
|Commercial and Industrial New Construction||Up to 15 years as specified in the legislation that creates the CRA||Up to 15 years as negotiated and approved in an CRA Agreement|
In order to use the Community Reinvestment Area program, a city, village, or county petitions to the Ohio Development Services Agency (ODSA) for confirmation of a geographical area in which investment in housing has traditionally been discouraged. Click herefor the process to establish a Community Reinvestment Area. Once an area is confirmed by the Director of ODSA, communities may offer real property tax exemptions to taxpayers that invest in that area.
Businesses interested in pursuing this incentive should contact the local Community Reinvestment Area Housing Officer in the city, village, or county (in the case of a township location) of the potential investment.
Active Community Reinvestment Areas created and operating under pre-1994 legislative authority were established directly by municipalities or counties and did not need the Director of ODSA's authorization at that time. In these types of CRAs, local jurisdictions do not have the flexibility to restrict the type of projects - residential, commercial or industrial - eligible under the program, nor does it grant local jurisdictions the ability to grant an exemption of less than 100 percent.
Please note that pre-1994 CRA authorizing legislation can only be amended twice after July 1994 and still retain its operation under the old legislation. A third amendment would invoke the new CRA rules, and require the local jurisdiction to petition the Director of ODSA to confirm the area under the post-1994 rules.