KMK Law Real Estate Blog

On December 8, 2016 the Ohio Senate passed House Bill (“HB”) 463. HB 463 in part amends Ohio Revised Code (“ORC”) Chapter 3735, which governs Community Reinvestment Area tax exemptions (a “CRA”).  Previously a CRA for remodeling or renovation project was limited in term to 12 years; however, HB 463 extends this term to 15 years, the same enjoyed by new construction projects.  Also, HB 463 amends the valuation calculus of an abatement granted to a remodeling project.  Specifically, ORC 3735.67(A) is amended to allow an exemption from the increased assessed valuation of an existing structure after remodeling has begun as opposed to after completion, as was the Code under the prior rule.  In other words, the valuation rule is clarified to mean all increased value regardless of the cause.  In contrast, the prior rule would have required county auditors to parse what increase in value was attributable to renovation and what was not.  In sum, HB 463 has amended the Code to make the CRA a more certain and useful tax abatement tool for remodeling projects affording for them the same term as new construction and clarifying the rule for valuing the abatement received.