Property tax abatements an incentive for growth

History is happening in our city. A local realtor reported to me this week that we have only 75 active real estate listings in the City of Natchez. This is in stark contrast to just a few months ago when we had several hundred – signs seemingly in every yard!

This is indeed reason to celebrate! And now opens a tremendous opportunity that we are already beginning to see take place: the renovation of older properties – and in Natchez, we have plenty.

The increased cost of new construction, coupled with the declining inventory of available housing, has created a perfect opportunity to “renovate” Natchez – but we must prepare to make the most of it. Our historic tax credits are a great incentive, and with our historic properties, we offer more than any other city in Mississippi. But we have more to offer. It is time to discuss Tax Abatements.

We’ve been doing a little research: Section 17-21-5 of the Mississippi State Code allows any municipality to exempt a property undergoing renovations of all local ad valorem taxes on the renovation amount for a period of seven years maximum (excluding taxes for school districts).

These tax abatements are allowed in central business districts, historic districts, or historic landmark sites, and the exemption applies to the increased taxes resulting from the property improvement.

In other words, for renovations downtown, in historic districts, and at historic landmarks, taxes can remain unchanged for seven years, except for school district taxes, regardless of how much the property value increases due to a renovation.

This can be a powerful incentive for development!

Here’s the good news: Natchez already has a tax abatement ordinance, adopted in 1999.

Largely forgotten, it has been severely underutilized. But it’s still on the books – and we plan to put it back into use immediately.

The current ordinance allows for a seven year tax abatement on renovations, as long as tax abatement applications are submitted to the City of Natchez along with supplemental materials such as cost estimates and invoices for review and approval by the Mayor and Board of Aldermen.

All projects within the historic districts must also be reviewed by the Natchez Preservation Commission.