eXp Realty LLC

Tax abatement: What homebuyers should know

by Abbey Napodano 08/14/2023

Property tax abatement programs can be helpful to homebuyers in several ways. While they can help you save money long-term, buying a property with a tax abatement can have potential downsides. Here are some key things about property tax abatements for buyers to consider:

How property tax abatements work

Property tax abatement programs are offered by some cities and counties to significantly reduce--or eliminate--property taxes on a home with major improvements. You can either apply for an abatement on a property you already own, or purchase a home with an abatement already established. If approved, you'll be able to pay taxes based on the value of the home before the improvements, potentially saving significant amounts of money.

What are the benefits?

The savings on your property taxes are the largest benefit to tax abatement programs. If you're planning to buy a new home, finding a property with a tax abatement means finding a great deal on a home you might not be able to afford otherwise. Higher equity from improvements and rehabilitation equals higher property taxes, but purchasing a home with an abatement allows you to pay based on the value before the changes.

What are the drawbacks?

There are some drawbacks to tax abatement programs homebuyers should be aware of. The primary downside is most qualifying homes for tax abatement are in neighborhoods with lower demand. Tax abatement programs are often used as incentives for buyers to help with urban development and revitalization.

The other major issue tax abatement can cause comes when the abatement period ends. If you live in the new home beyond the abatement deadline, your property taxes could suddenly increase. Staying aware of this deadline is crucial for avoiding unpleasant surprises on your annual tax bill.

While there are disadvantages to tax abatement, it can be an excellent opportunity for many homebuyers. Keep these factors in mind when considering your options for buying your dream home.

About the Author
Author

Abbey Napodano

Hello, I'm Abbey, a lifelong resident of the growing Charlotte area! My joy stems from sharing this wonderful region with my young son and being an integral part of the community.

With a degree in Psychology from UNC Charlotte, I've seamlessly applied my academic knowledge to my fulfilling Real Estate career. My foundation in psychology has enabled me to understand the unique needs and preferences of my clients, fostering strong, lasting relationships in the process.

My journey in real estate has been shaped by unwavering integrity, diligent work ethic, and the meaningful connections I've forged with the incredible individuals who share the privilege of calling the Carolinas their home.

As a resident of Tega Cay, SC, my family and I delight in an active lifestyle, enjoying things like pickleball, yoga, lakeside adventures, and the Tega Cay outdoor concerts. Embracing the heart of this community, I am inspired to assist you in finding your dream home and loving where you live.

Let's embark on this exciting journey together, creating cherished memories and finding the perfect place you'll be thrilled to call home.