Tax Abatement

Downtown Warsaw Tax Abatement For Eligible Retrofit Projects

The "target area" designation allows building retrofits involving retail and residential uses to be eligible for tax abatement.

This brief historical overview helps explain the process that has already taken place that fulfills statutory requirements allowing an area to be eligible for tax abatement. Warsaw now provides an incentive for downtown property owners to make structural improvements to their businesses and second story residential properties. With tax abatement, if the assessed value of the property increases as a result of the improvements, the higher taxes will be reduced for a fixed period of time.

Who Is Eligible?

The answer to that question varies with the renovation project. We strongly suggest that property owners interested in abatement consult with legal counsel first to establish the nature of the renovation, including equipment purchases, and the corresponding filing requirements such as timeliness, appropriate forms, and accountability criteria. NOTE: Since the City has declared the Central Business District as an "Economic Development Target Area", one giant step has already been taken care of. A legal counselor can assist a property owner with the remaining steps.

It is important to note that approval from the City Council for tax abatement must be obtained prior to initiation of redevelopment or rehabilitation before a deduction may be approved by the County.

Where Does This Leave A Property Owner Interested in Pursuing Abatement For Their Downtown Retrofit Project?

1. The following guidelines should be helpful to property owners seeking tax abatement.
2. Obtain a Statement of Benefits (SB-1) form from either the Auditor's office in the County, or the Clerk Treasurer's office in the City. The forms are made available through the State Board of Tax Commissioners.
3. When necessary, consult a legal counselor for assistance with filling out the form. The three main categories of information on the SB-1 form address:
   • Estimate of employees and salaries retained and added as a result of the proposed project,
   • Estimate of real estate improvement costs, and
   • Estimate of new machinery costs.
4. Current cost values and assessed values for real estate and machinery, if applicable, need to be included on the form as well.
5. Contact the City Planner at the Planning and Building Department in Warsaw. He will review the SB-1 form, visit the site where the proposed improvements will take place, and schedule a review of the application on the next City Council Agenda.
6. The City Council, upon receiving the City Planner's preliminary review and recommendation, will take action to grant/deny/or table the abatement request.
7. If the request is granted, the Clerk Treasurer will forward the approved SB-1 form to the County auditor.
8. The instructions at the top of the SB-1 form indicate that the deduction forms for real estate improvements and new machinery must then be filed with the County Auditor. Consult with the County Auditor's office for further guidelines.
   
   

Following approval of abatement, compliance statements are filed annually by the property owner within the first two months of the year. The City Council reviews the compliance statements as they relate to the original projections documented on the SB-1 forms. Abatement is either permitted to continue or is denied based on the compliance criteria.

Any questions about the process can be directed to Warsaw's City Planner. Questions about site specific retrofits, property and equipment values, and application form requirements should be directed to a legal counselor.