Planning and Development Committee
AN ACT CONCERNING DESIGNATED REHABILITATION AREAS
SUMMARY: The law allows municipalities to defer an increased property tax assessment on property located in a designated rehabilitation area if the owner agrees to rehabilitate the property or build new multifamily rental or cooperative housing on it. This act allows municipalities to also defer an assessment increase if the property is a brownfield site and the owner agrees to build the same housing described above or a new common interest community or mixed-use or commercial structure on it.
Brownfields are abandoned or underutilized sites where groundwater or soil contamination discourages redevelopment or reuse.
EFFECTIVE DATE: October 1, 2011
BACKGROUND
Local Option Property Tax Incentives for Rehabilitation Areas
By law, a municipality's legislative body must adopt a resolution designating the rehabilitation area, which may include all or part of the municipality, before it can offer the deferred assessments. The resolution must specify the criteria for the deferred assessments, including the (1) property's initial condition, (2) extent and nature of the improvements, and (3) acceptable uses of the property. The municipality can fix the property's assessment during the rehabilitation or construction period, for up to seven years, and then defer the increased assessment attributed to the improvements for up to 11 years. The deferral starts at 100% forgiveness in the first year and decreases by 10% in each subsequent year. The deferral is contingent on the continued use of the property for the specified purposes; it ends when the property is sold or transferred to be used for other purposes, unless the municipality agrees to the change.
OLR Tracking: RP: SP: PF: df/ts