The Urbana/Champaign County Enterprise Zone took effect Friday, opening the door for major tax breaks for new homeowners and businesses.
New homes and businesses built within the 9.2-square-mile area will receive five years of property tax breaks, starting off at 100 percent the first year and scaling down by 20 percent each year after. Commercial and industrial ventures are eligible for benefits lasting seven years if they create 50 or more jobs. Builders of single-family, duplex, commercial and industrial projects are also eligible for sales tax exemptions if they buy their materials from approved vendors.
“New residential and commercial development will build Urbana’s tax base and help us reach our Mayor-Council goal of lowering the overall tax rate for all Urbana taxpayers, and create new jobs," Mayor Laurel Prussing said.
Pussing said the zone's residential component makes it unique and more inclusive than other enterprise zones, which often focus exclusively on attracting new businesses.
"Urbana’s new enterprise zone includes residential, which is unusual," she said. "New homes built in our enterprise zone will pay less in total property taxes than they would in Champaign for the first 13 years."
Using a $225,000 home as an example, city officials said property tax savings over five years would total approximately $20,000.
Another significant feature of the new enterprise zone is the number of partnering agencies that have agreed to extend abatements, including Unit 116 School District, Urbana Park District, City of Urbana, Cunningham Township, Champaign County and Champaign-Urbana Mass Transit District.
The enterprise zone is authorized for 15 years.
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