Tax Increment Reinvestment Zones
Tax increment financing (TIF) is a financing method local governments can use to pay for improvements that will draw private investment to an area. Tax increment financing isn’t a new tax; instead, it redirects some of the ad valorem tax from property in a geographic area designated as a Tax Increment Reinvestment Zone (TIRZ) to pay for improvements in the zone.
Benefits Of A TIRZ
The benefits of a TIRZ include:
- Builds needed public infrastructure in areas lacking adequate development to attract businesses.
- Encourages development, thereby increasing property values and long-term property tax collections.
- Reduces the cost of private development by providing reimbursement for eligible public improvements.
(Source: Texas Comptroller of Public Accounts)