Residential Tax Abatement

Program Overview

The City of Cleveland offers tax abatement as an incentive to help encourage and spur investment across all of its neighborhoods. This program is available to both homeowners and developers. To be eligible:

• All rehabilitation or new construction work must be completed under a valid and accurate permit issued by the City of Cleveland Department of Building and Housing.
  • The City of Cleveland will not accept applications for improperly permitted improvements. Examples of improperly permitted improvements include work completed under a permit that does not accurately reflect the actual cost of the work or work completed outside the scope of the work described on the building permit.
  • For new Construction and whole-house rehabilitation, the permit must require a Certificate of Occupancy.
• The property must be in the City of Cleveland limits.
• Work performed must comply with the City of Cleveland Green Building Standard.

Abatement and affordable set-aside criteria depend on the project and Community Reinvestment Subarea (CRA). Abatement value for single-family projects can range from 85% to 100% of the increased assessed taxes and may be capped at home values between $350,000 and $450,000. For Multi-family projects, abatement will vary between 85% and 100% of the increased assessed taxes and all projects must set aside units affordable to families making 100% of the Area Median Income based on the applicable CRA subarea. The 2024 Tax Abatement Program Chart shows maximum abatement percentages and values and other program features.

For new construction Single-Family projects, 100% abatement may be granted for projects that meet Age-in-Place building criteria. The Developer must submit architectural plans and a completed “Age-In-Place” checklist. The Department of Community Development will review these documents for completeness and require an on-site inspection for final approval.

All projects may be eligible for a 100% abatement if all units in the project are affordable to families making 80% or less of the Area median income. Multi-family applicants must demonstrate their ability to build and maintain affordable units defined as restricted to families at or below 100% area median income. The applicant may submit a legal document restricting 100% of the units to families whose income is 80% or less than the area median income for single-family housing and 100% or less than the area median income for Multi-family housing with their Part II application. The City of Cleveland will request income documentation to very compliance annually. Every three years during the affordability period, all projects will be audited and reviewed. Tax Abatement recipients must present rent rolls, audited financial accounts, and tenant income verification documentation.

Multi-family projects require a Community Benefits Agreement.

The Cuyahoga County Fiscal Office determines the assessed taxes based off of the dollar amount featured in the building permits. The County will make a final determination based on permit values and their own appraisal of the property and work performed. Timing of the abatement term is dependent on the time that the permitted improvement(s) to the dwelling create a new taxable value, according to County records. Taxes may increase or decrease during the abatement period when voted changes in tax rates, and state-mandated reappraisals.

The property owner will be responsible for paying property taxes based on the assessed value of the land and the building(s) before improvements.

Details on Affordability Requirements for Multi-Family Projects

Affordability Set-Aside Requirements for each CRA subarea:

1. Strong Market 25% of units
2. Middle Market 15% of units
3. Opportunity Market 5% of units

Please note: City Staff will round up when determining final unit counts. City staff will require an even distribution of units across all unit types in the project.

Projects may reduce their unit count by 1 for each unit the project is serving at or below 30% of the Area Median Income for 15 years.

When determining how your project will comply with the City’s affordability requirements, there are three options:

Option 1 – Third Party Enforcement

This option is intended for projects that will meet the City’s affordability requirements via their use of another source of funds that have similar or deeper affordability requirements. Examples include Low-Income Housing Tax Credits, Project-Based Vouchers, or other Federal Programs. Projects seeking this option must submit the following documents:

• List of all units that clearly show rents and AMI targets for each unit in the project.
• Copies of legal documents that are used to enforce the affordability requirements.
• These documents must be recorded on the property’s title and enforced by a third-party agency.
• In order to qualify, affordability requirements must be consistent with City Policies and last for a period of 15 years or more.

Option 2 – Self-Managed Affordability

This option is intended for parties that would like to maintain affordable units consistent with the City’s requirements but are not required to do so via any other source of financing. Choosing this option will subject your project to an audit every three years where City Staff will confirm your compliance with its affordability requirements. In order to qualify for this option, you must submit the following documents that include details regarding:

• List of all units' square footage, bedroom and bathroom counts, rents, and AMI targets for each applicable unit
• Provide all information used to verify income eligibility for each unit including:
  • A list of all household members and their age
  • Picture ID for all members over 18 years old
  • Income documentation for each household member above age 18 including (as applicable):
    • Two years tax returns
    • Most recent 90 days’ pay stub
    • Social Security/Supplemental Security Award Letter (as applicable)
    • Notarized Statement of No Income

Option 3 – Payment in Lieu of Affordability Requirements

This option is intended for projects that do not or cannot meet the City’s affordability requirements. At the submission of the Part II application, the applicant must submit a check made payable to the City of Cleveland in the amount of $20,000 for each required affordable unit.

Please note: it is expected that applicants will select one of the above options at the time that they submit a Part I application. That decision may be changed prior to submission of the Part II application. All applicable materials and payments must be submitted with the Part II application.

Household Income Limits

Limits last updated May 2025.

Aging-In-Place

For new construction Single-Family projects, 100% abatement may be granted for meeting the City of Cleveland's Age-In-Place Criteria. Eligible projects may consist of three or fewer units. Upon completion of the project and final approval, abatement will be granted for 15 years at an amount up to $450,000 per home.

Developers and homeowners must submit architectural plans to Carol Madison, Tax Abatement Manager (cmadison@clevelandohio.gov) and Johnnie Warren, Housing Inspector (jwarren@clevelandohio.gov) for review prior to commencing the project. Upon completion of the project, the Tax Abatement Office will review all submitted materials for completeness and require an on-site inspection prior to granting final approval.

Selection and Award

Completed Tax Abatement applications are processed in the order they are received. Depending on season and volume, processing time may vary. If an applicant's submission is incomplete, processing time restarts until all application materials' full and final requests are met. All requests with incomplete application packets older than 60 days will be rejected. For further information, contact Carol Madison at 216-664-3442 or by email: cmadison@clevelandohio.gov.

Revocation

Under Ordinance 482-2022 amended by 719-2024 under Section 3735.68 of the Revised Code, the City may terminate the residential tax exemption after the first year if the Housing Officer finds that the property is:

• Not being properly maintained or repaired due to the neglect of the owner
• That the owner is in default of the Community Benefits Agreement (CBA)
• That the property is being used as a limited lodging or short-term rental facility as defined in the Codified Ordinances
• That the City has revoked the owner’s Rental Registration
• Or that the property taxes have become certified delinquent

Once terminated, the City of Cleveland will not reinstate the exemption.

The owner of property whose exemption has been revoked is required to reimburse the taxing authorities within whose taxing jurisdiction the exempted property is located for the amount of real property taxes that would have been payable to those authorities had the property not been exempted from taxation.