Fort Wayne Tax Abatements: Phase-In, Timing, and Eligibility

Fort Wayne tax abatements phase in property taxes on new investment over three to ten years rather than eliminating them. In the first year you owe nothing on the increased assessed value from your project, and each year after that you pay a larger share until the abatement expires. The length you receive depends on a 100-point scoring system that weighs wages, jobs, and investment, and the property must be designated an Economic Revitalization Area before you break ground or install equipment.

How the Phase-In Works

The abatement applies only to the added assessed value from your project, not to the property’s existing value. You keep paying normal taxes on what was already there. The exempt share of the new value drops on a fixed schedule tied to how many years of abatement you were awarded.

Fort Wayne uses four standard schedules for both real property and equipment:

Three-year: 100% exempt in year one, 66% in year two, 33% in year three.
Five-year: 100%, 80%, 60%, 40%, 20%.
Seven-year: 100%, 85%, 71%, 57%, 43%, 29%, 14%.
Ten-year: 100%, 95%, 80%, 65%, 50%, 40%, 30%, 20%, 10%, 5%.

These percentages represent the share of the new assessed value that is exempt from taxes each year.¹ Equipment follows the same percentages at each tier.² A separate schedule for affordable housing projects holds the exemption at 100% for the first five years before stepping down.

What Qualifies

Two categories of investment are eligible. Real property abatements cover new construction, building additions, and substantial rehabilitation that raises the property’s assessed value. Personal property abatements cover equipment used for manufacturing, fabrication, assembly, research and development, information technology, and on-site logistics.³

Equipment does not have to be brand new. Used equipment can qualify as long as it was not previously used and taxed in Indiana.³ A machine bought out of state and shipped in is eligible; the same machine bought from an Indianapolis seller is not.

The ERA Timing Rule

Your property must sit within an area the Fort Wayne Common Council has officially designated as an Economic Revitalization Area. Under Indiana law, ERAs are locations within city limits that have become undesirable for normal development because of deteriorating buildings, stalled growth, aging infrastructure, or declining property values, or where obsolete facilities threaten local employment and tax revenue.⁴

Here is the detail that disqualifies applicants more than any other. The ERA designation must be in place before the eligible investment begins.⁵ Break ground on the building or install the equipment before the Common Council formally designates the area and you have likely lost the abatement entirely. Engaging the Community Development Division early in project planning is how applicants avoid this trap.

How Long an Abatement You Get

Fort Wayne does not hand out ten-year abatements to everyone. Each application is scored on a 100-point scale, and the total decides the tier:

20 to 39 points: three-year abatement
40 to 59 points: five-year abatement
60 to 69 points: seven-year abatement
70 to 100 points: ten-year abatement

Points come from five main categories, plus a sustainability bonus.²

Investment, up to 30 points. Total new equipment investment, investment per employee, and estimated local income taxes from retained and new jobs. Investments above $5 million score the highest.
Economic base, up to 20 points. How much of the business is done outside Allen County and the location quotient for the primary occupation. Companies exporting more than 75% of their output outside the county earn the maximum.
Jobs, up to 20 points. Total permanent positions retained and created. Retaining over 250 jobs or creating over 100 new ones scores the highest in each subcategory.
Wages, up to 25 points. The median salary of created and retained positions. Jobs paying above $60,000 earn 21 points; jobs under $39,000 earn zero.
Benefits, up to 10 points. A major medical plan earns 7 points. Pension, tuition reimbursement, life insurance, dental, or disability coverage adds up to 3 more.
Sustainability bonus, 5 points. Green building techniques such as LEED certification earn the full amount.

Wages carry more weight than many applicants expect. A company creating 50 jobs at $35,000 a year scores zero on wages, which alone can be the difference between a three-year and a seven-year abatement. Fort Wayne has deliberately pushed wages higher in its scoring to attract better-paying employers.

Residential Abatements for Homeowners

Abatements are not limited to businesses. Homeowners and residential developers can receive a five-year phase-in on property located in an area the Common Council designates as residentially distressed. The schedule runs 100%, 80%, 60%, 40%, and 20%.⁶

To qualify under the primary pathway, parcels must contain only small residential dwellings of up to four units, or be vacant; the dwellings must not be permanently occupied; and the property must either have been sold at tax sale without redemption or be owned by a local government unit. An alternative pathway covers broader areas where a significant number of homes sit vacant or show serious building deficiencies and the area has experienced a net loss of housing units, though these broader designations cannot exceed 10% of the Common Council’s jurisdiction.⁶

One hard requirement: you must build or rehabilitate the dwelling within two years of the distressed area designation. Miss that window and the deduction is gone.

Applying Through the City

Applications go through the Fort Wayne Community Development Division, which administers abatements within the city’s corporate boundaries.³ The core document is the Statement of Benefits, a state-prescribed form from the Indiana Department of Local Government Finance. Real property improvements and personal property (equipment) use separate versions.⁷

The form asks for the project location, the nature of the improvements, start and completion dates, current employee headcount, retained and new jobs with salaries, current assessed values, the estimated value of the proposed project, and the net change after subtracting any property being replaced. It also asks for estimated solid and hazardous waste converted and any other community benefits the project will produce.

These numbers are not aspirational. They become the benchmarks the city measures you against every year for the life of the abatement. Overcommitting on jobs or investment to score more points can backfire during compliance review.

Council Approval and the Auditor Filing

Once Community Development reviews the application, it moves to the Common Council for a two-step process required under Indiana law.⁴ The Council first adopts a declaratory resolution designating the ERA and describing its boundaries, then publishes notice. A public hearing follows where the community can raise objections or support the proposal. After hearing testimony, the Council votes on a confirmatory resolution that finalizes, modifies, or rescinds the designation. If it passes, the abatement schedule and duration are locked in based on the point score.

Council approval alone is not enough. The initial deduction form must be filed with the Allen County Auditor before May 16 of the year the addition to assessed value is made, or within 30 days of receiving the assessment notice, whichever is later.⁴ Miss that deadline and you lose the deduction for the year regardless of Council approval.

Annual Compliance and Revocation

Approval is not the finish line. Every year during the abatement, you must file a Compliance with Statement of Benefits form, the CF-1, with both the Allen County Auditor and the Common Council.⁷ The CF-1 compares your actual investment, jobs, and payroll against what you projected in the original Statement of Benefits.

The deadline falls in mid-May, and the Allen County Auditor’s office has stated that failing to submit the form on time means the office cannot apply the abatement for that year.³ No warning, no grace period. One missed filing and you pay full taxes on the new value for that year even if you are otherwise in complete compliance.

The Common Council can also terminate the abatement entirely. Under Indiana law, the Council may adopt a resolution ending the deduction if it determines you have not substantially complied with your Statement of Benefits.⁴ There is a safety valve: the Council cannot terminate the abatement if the shortfall was caused by factors beyond your control, such as a decline in demand for your products, fire, or flood. If the noncompliance is within your control — say, you promised 50 jobs and hired 20 after a strategy change — termination is on the table. Before revoking, the Council must send written notice explaining the reasons, hold a public hearing, and allow you to appeal.

Effect on Your Federal Taxes

An abatement cuts your local property tax bill, and that has a direct downstream effect on your federal return. You can only deduct property taxes you actually pay. If an abatement lowers your property tax liability by $8,000 in a given year, your federal property tax deduction drops by the same $8,000.⁸ This applies whether you itemize on Schedule A as a homeowner or deduct property taxes as a business expense. The abatement itself is not treated as taxable income at the federal level because no money changes hands; you simply pay less tax. Any direct grants or cash incentives that come alongside an abatement can be treated differently, so review the full incentive package with a tax advisor.⁹

1
American Legal Publishing. Fort Wayne Code 153.19 – Deduction Periods and Abatement Schedules for Real Property
2
American Legal Publishing. Fort Wayne Code 153.20 – Deduction Periods and Abatement Schedules for Personal Property
3
Allen County, IN. Abatements
4
Justia. Indiana Code Title 6, Article 1.1, Chapter 12.1 – Deduction for Rehabilitation or Redevelopment of Real Property in Economic Revitalization Areas
5
City of Fort Wayne. Tax Phase-ins (Abatements)
6
American Legal Publishing. Fort Wayne Code 153.26 – Designating Residentially Distressed Areas
7
Indiana Department of Local Government Finance. DLGF Forms
8
Internal Revenue Service. Publication 530 – Tax Information for Homeowners
9
Office of the Law Revision Counsel. 26 U.S. Code 118 – Contributions to the Capital of a Corporation