Ventnor considers tax abatements for home improvements

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VENTNOR – The Board of Commissioners is considering naming the city an area in need of rehabilitation, which would provide homeowners with tax incentives to improve their homes.

“This is a way to stimulate growth in the city,” Mayor Michael Bagnell said.

Residents who make substantial improvements to their home, including raising it to the new minimum flood elevation level, would receive a tax abatement on the assessed valuation of the improvements. 

The first step in the process is to hire a planner to prepare a report that shows the city meets at least one of the criteria set forth in the New Jersey Local Redevelopment and Housing Law. To qualify, the city must show that more than half its housing stock is more than 50 years old, a majority of structures are deteriorated or substandard, or that the designation could prevent further deterioration and improve the community.

The rehabilitation designation differs from the redevelopment designation in that the city would not have the powers of eminent domain.

“The good thing about this is it has nothing to do with eminent domain,” Commissioner Theresa Kelly said.

The commission will decide at its next meeting if it will issue a request for proposals from professional planners to prepare the report, or amend James Rutala’s $15,000 grant writing contract to include writing the rehabilitation report. Rutala’s contract amount would not increase, city attorney Amy R. Weintraub said.

Homeowners could see taxes on the assessed value of the improvement abated for five years. In the first year, the homeowner would pay the full tax on the property before the improvement is assessed. In the second year, the homeowner would pay full tax on the pre-improved property assessment and 20 percent of the assessed value of the improvement. In subsequent years, the tax on the improvement would increase an additional 20 percent until the full tax on the new assessment is due in the sixth year.

“This allows people to fix up their homes with a discounted rate on their taxes,” Weintraub said.

Although taxpayers will be getting a break, the city could realize increased revenue from demolition and construction fees, Bagnell said.

Once the report is complete, it will be reviewed by the Planning Board, which can accept, reject or amend it, and make a recommendation that the Board of Commissioners adopt it. The report would also have to meet the muster of the New Jersey Department of Community Affairs.

 


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