What's the difference between abatements and exceptions?

Abatements, Exceptions

Tax abatement

A tax abatement happens when a local government reduces or eliminates taxes for real estate properties. Cities and municipalities may create tax abatement programs to encourage growth in certain areas. Cities and municipalities may also provide tax abatement for homeowners. Most tax abatements use a set percentage or amount.

For example, a reduction in the property tax amount if payment is made in the first 45 days of billing. Another example might be a state-funded propgram that pays or reimburses the city or municipality for the first $1,000 that a primary owner is billed.

Tax exception

A tax exception, also known as a tax exemption, may use a calculation that is more complicated than a tax abatement. The tax exception may include different thresholds for use and an exception may include the property value before tax is calculated.

For example,government-owned parcel exemptions, homestead exceptions, senior and disabled exceptions, low income exemptions, active military exemptions, military veteran exceptions, renovation exceptions, and energy incentive exceptions.

202202, 2022Mar17