Tax Increment Financing
The Town of Norwood supports responsible business development. We actively encourage the growth and prosperity of our existing businesses and work to attract new businesses that create good jobs and expand the tax base. As part of this effort, the Town’s Economic Development Committee has used Tax Increment Financing (TIF) agreements to help our existing businesses expand and provide economic incentives for new businesses to locate in Norwood.
The Massachusetts Office of Business Development (MOBD) Economic Development Incentive Program (EDIP) was established in 1993. The EDIP is: “A program designed to promote increased business development and expansion in Economic Target Areas of the Commonwealth, to be administered by the Economic Assistance Coordinating Council (EACC).”
In July 1994 the State approved the first TIF projects; today the EDIP is the largest new job generating program in the Commonwealth.
Tax Increment Financing Agreements area negotiated agreement between business and host municipality. The percentage exemption applies to the incremental increase of assessed value of the parcel. The agreement may contain exemptions on personal property tax per M.G.L. CH 40 & 59.
- TIF’s have a 5 year minimum term with a maximum of 20 years, or anything in between.
- Business pays full tax rate on the “base value” of the property,
- An exemption from property taxation on all or part of the increased value accrued, as a result of a development (the “increment”).
- The percentage of an exemption (for incremental real and personal property tax value) may range from 5% to 100%.
- All TIFs must be approved by Town Meeting;
- Following a favorable vote at Town Meeting the Town must petition the State Economic Assistance Coordinating Council (EACC Board) for final approval.
- TIFs are an economic development tool that spurs local job growth.
- They are a catalyst for real estate investments that broadens the Town’s tax base.
If your company is considering locating in Norwood or is already here and is planning to expand, contact: Mr. Paul Halkiotis, Director of Community Planning and Economic Development
The two key components of TIF agreements
- 1. Commitment from a company to invest in a real estate development project.
- The types of development projects are: (1) new construction, (2) building expansion and (3) building renovation.
- 2. Job Creation
How TIF's are structured
• A TIF is a discount on real estate taxes incremental increased value of a property from a development project.
• Base Assessment – The value of property prior to any development project.
• Increment – The difference between the base property value and real estate value after a development project.
• Tax Discount – The percentage reduction of real estate taxes on the increased incremental value of the property.
If the TIF satisfies the objectives of the EDC ( Economic Development Committee)
If the EDC thinks that the development project and job creation will benefit the Town, they will negotiate a TIF with a company
How does EDC recommend approval to the Board of Selectmen
If the Selectmen agree that the TIF will benefit the Town, they will submit a Warrant Article to approve the TIF agreement at the next Town Meeting.