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Tax Increment Financing (TIF Districts)

What is a TIF?

TIF (Tax Increment Financing) districts are properties within a boundary approved by the local entity which controls that tax district (usually the city). These districts then can receive financing to improve the status of the properties within those boundaries, whether that be for industrial development, economic development, infostructure for affordable housing development, or other residential development or expansion.

How Does a TIF District Work?

TIF Districts are used to improve unimproved, under-improved, or blighted portions of the city/county. The financing is then repaid using any increment in assessed value as it occurs within that district and may be spread over a period of 20 years. Over that period, the value was established at the time of the TIF still goes to the taxing entities as it had previously, but the taxes collected because of changes in value due to improvement or market conditions is used to pay the financing. Once the TIF is paid, the property still pays property tax as it has previously, but the entire tax bill is applied to the entities (city, county, school district etc.) as normal.