Thinking about buying or renovating in Olde Towne East and wondering how a tax abatement might change your monthly costs? You are not alone. Abatements can lower property taxes for years, but the details can be confusing when you are comparing two homes or planning a major rehab. In this guide, you will see what actually changes in your budget, how the math works with a simple example, and the key steps to verify an abatement in OTE. Let’s dive in.
OTE CRA basics
Olde Towne East sits within Columbus’ Near East Side Community Reinvestment Area, where qualifying residential projects can receive up to a 15‑year, 100% exemption on the increase in property value created by new construction or major rehab. That means you still pay taxes on the pre‑improvement value, while the added value from the project can be exempt during the term. You apply and the City certifies the completed work, then the county auditor applies the abatement to the increased value. You can confirm the area designation in the Near East Side overview and see program details in the City’s Residential Tax Incentives guide.
- Reference: Near East Side CRA context
- Program details: City of Columbus Residential Tax Incentives
What changes in your cost
Abatement affects only some line items in your monthly and annual spend.
- Mortgage principal and interest: no change.
- Property taxes: reduced on the improved value for the abatement term. You still pay taxes on the pre‑improvement value.
- Homeowners insurance, HOA/condo dues, utilities, and maintenance: no change.
- Special assessments or local charges: may still apply and are separate from CRA exemptions. Check the parcel’s tax detail with the Franklin County Auditor.
Important: Abatement reduces taxes only on the abated portion. New levies or reappraisals can still change what you owe on the non‑abated base. See this overview of how taxes can still shift with local levies: COCLT tax abatement notes.
Example: with and without abatement
Below is a simple, illustrative scenario to show the difference. Use your parcel’s actual numbers for decisions.
Assumptions:
- Post‑construction or post‑rehab market value: 400,000 dollars
- Pre‑improvement assessed value: 50,000 dollars
- Increase in value: 350,000 dollars
- Illustrative effective property tax rate: 1.33% for a Columbus parcel in Franklin County (actual rates vary by tax district)
Without abatement:
- Annual property tax ≈ 400,000 × 1.33% = 5,320 dollars
With 100% CRA abatement on the increased value:
- Taxed only on pre‑improvement value: 50,000 × 1.33% = 665 dollars
Illustrative annual savings:
- 5,320 − 665 = 4,655 dollars per year during the abatement term
This is a model, not a quote. For a real estimate, use the county’s calculator and confirm the parcel’s tax district rates: Franklin County Tax Estimator. When the 15‑year abatement ends, the full post‑improvement value becomes taxable, so plan for a possible tax jump.
Timing and transfer
Certification happens after construction is complete, then the county applies the abatement to the improved value. If you are buying a home still under construction or just finished, ask about application status and expected certification timing. In Ohio, CRA abatements typically stay with the property for the remaining term, but always confirm the status and remaining years for a specific parcel with the City and the Franklin County Auditor. See an example of Ohio CRA guidance that the abatement runs with the property here: CRA abatement property transfer guidance.
Policy notes that affect projects
Columbus categorizes CRA areas and may require affordable housing set‑asides for some projects or allow a fee in lieu. These rules mainly affect developers and how larger projects get approved, which can influence supply and pricing in OTE. For a quick background on recent policy updates, see this coverage: Columbus CRA policy and affordability.
How to check a property in OTE
Use this quick process to verify eligibility and run the numbers.
- Confirm CRA coverage and program rules. Start with the City’s Residential Tax Incentives page for eligibility, maps, and application steps: Columbus Residential Tax Incentives.
- Estimate taxes. Enter your expected values and tax district in the Franklin County Tax Estimator.
- Ask about certification status. For new builds or rehabs, confirm whether Part 1 was submitted and when certification is expected after completion.
- Verify if the abatement runs with the parcel. Contact the City’s residential incentives team and the Franklin County Auditor to confirm years remaining and any conditions.
Historic credits and OTE rehabs
Historic tax credits are different from abatement. Credits reduce state or federal income tax liability for qualified rehab work, while CRA abatement reduces local property taxes on the added value. Some OTE projects may qualify for both, but each program has its own application, timing, and compliance. Learn more here: Ohio historic tax credits.
Buyer and seller takeaways
- Abatement can materially lower property taxes for up to 15 years, which can improve monthly affordability in OTE.
- Only property taxes change. Mortgage, insurance, utilities, and HOA dues do not.
- Model the end of the abatement. Plan for the post‑term tax bill so there are no surprises.
- Verify everything at the parcel level. Use the City guide and county estimator to confirm the specifics for your address.
If you want help comparing two homes or underwriting a renovation with abatement in mind, our team can model scenarios and flag timing, compliance, and resale considerations. Reach out to Core Realty Collection to talk through your OTE plan.
FAQs
What is a Columbus CRA abatement in OTE?
- It is a program that exempts property taxes on the increase in assessed value from qualifying new construction or major rehab in designated areas like Olde Towne East, while you still pay taxes on the pre‑improvement value.
Does abatement change my mortgage payment?
- No. It only affects the property tax portion of your housing cost; principal and interest, insurance, utilities, and HOA dues do not change.
Can my taxes rise during the abatement term?
- Yes. New levies or reappraisals can change what you owe on the non‑abated base value or on items not covered by the abatement, even though the improved value is exempt.
Does the abatement stay if I sell the home?
- In many Ohio jurisdictions the abatement stays with the property for the remaining term, but you should confirm the status and years left with the City of Columbus and the Franklin County Auditor for the specific parcel.
How do I estimate savings on a specific OTE home?
- Use the Franklin County Tax Estimator to model both scenarios, then verify eligibility and certification status with the City’s Residential Tax Incentives team and the Auditor’s office.
How are historic tax credits different from abatement?
- Credits reduce income taxes for qualified rehab costs, while abatement reduces local property taxes on the added value; a project can sometimes use both, but each has separate rules and timelines.
