Property Tax Abatement

Property tax abatement in Indiana is authorized under Indiana Code 6-1.1-12.1 in the form of deductions from assessed valuation. Any property owner in a locally designated Economic Revitalization Area (ERA) who makes improvements to the real property or installs new manufacturing equipment is eligible for property tax abatement. Land does not qualify for abatement. Used manufacturing equipment can also qualify as long as such equipment is new to the state of Indiana. Equipment not used in direct production, such as office equipment, does not qualify for abatement.

Real-Property Tax Abatement Calculation

Real-property tax abatement is a declining percentage of the increase in assessed value of the improvement. Abatement periods and percentages are determined by the local governing body. Examples follow:

 

Three Year Abatement

Six Year Abatement

Ten Year Abatement

Year One

100%

100%

100%

Year Two

66%

65%

95%

Year Three

33%

66%

80%

Year Four

 

50%

65%

Year Five

 

34%

50%

Year Six

 

17%

40%

Year Seven

   

30%

Year Eight

   

20%

Year Nine

   

10%

Year Ten

   

5%

Personal-Property Tax Abatement Calculation

Personal-property tax abatement is a declining percentage of the assessed value of the newly installed manufacturing equipment, based on one of two time periods and percentages, as determined by the local governing body.

 

Five Year Abatement

Seven Year Abatement

Year One

100%

100%

Year Two

95%

90%

Year Three

80%

80%

Year Four

65%

70%

Year Five

50%

60%

Year Six

 

50%

Year Seven

 

40%

Property owners must apply for designation to the local governing body, usually the town board, city council, county council or the metropolitan development commission having jurisdiction over the area. Information on the procedure for designation of an Economic Revitalization Area and the responsibilities of the property owner and local governing body is available by calling the Economic Development Corporation Michigan City, Indiana at (219) 873-1211.

For more information on tax abatement, contact:

Clarence Hulse
Executive Director, EDCMC
Two Cadence Park Plaza
Michigan City, IN 46360
(219) 873-1211 phone
(219) 873-1595 fax
chulse@edcmc.com