The City of West Fargo determined that the present method of assessment of real property did not encourage investment of capital in rehabilitation and remodeling of commercial and residential buildings which resulted in some properties being allowed to decay and become in need of repair and modernization; and thereby, resulting in a decreasing of the tax base.
The City chose to use the Property Tax Exemption for Improvements to Commercial and Residential Buildings (NDCC 57 to 02.2) as an economic development tool to prevent this from happening. Also known as the remodeling exemption, the City offers either a three or five year exemption based on the value of the completed project. If the property value increase is over $25,000 the property is eligible for 5 years. If it is less than $25,000 the property is eligible for 3 years.
The application is filed with the City Assessor and it is determined by the assessment staff if the improvements qualify for the exemption. A residential property must be at least 25 years old. There is not an age requirement on commercial properties. The exemption must be approved by the City Commission. The last assessment on record will remain for up to 5 years and any value gained by the remodeling would be exempted.
When to Apply
The best time to apply for the remodeling exemption is before the project starts. However, a property owner can apply after the project is completed and still be eligible. The Application for Property Tax Improvements form should be completed.