Home Improvement Tax Incentive Program
The Town of Little Elm is excited to now offer the Home Improvement Tax Incentive Program. This program is designed to provide an economic incentive to Little Elm homeowners who substantially reinvest in their homes.
The primary goals of the program are to:
- Increase the value of the Town's housing stock.
- Encourage reinvestment in residential neighborhoods.
- Provide an incentive for existing homeowners who may be on the fence about investing in their current home rather than buying a new or "step-up" home in another community.
- Create an instrument that displays the Town's commitment towards reinvestment in residential neighborhoods.
All homeowners in single-family zoned areas are eligible to participate, except those who are delinquent in property taxes or other fees.
To qualify, an improvement project involving the reconstruction or remodeling of a single-family home must cost at least $20,000 and be completed within 24 months of project approval.
To participate, the homeowner will be required to submit a home improvement incentive program application to Development Services before construction beginning, provide a cost estimate for the improvement project, consent to periodic inspections during construction, and verify final construction costs.
If an application is approved, the homeowner will be required to execute an economic development agreement with the town prepared and approved by the Town attorney.
A one-time incentive equal to ten times the amount of the increase in Town taxes will be paid to the homeowner based on the property's pre-construction and post-construction appraised value. The Denton County Central Appraisal District will determine the property's certified value.
The incentive will be paid to the homeowner pursuant to the economic development agreement on April 1 of the first full calendar year after to completion of the approved project.
Assume that a home improvement project commences in January 2018 and is completed in June 2018. Further, assume that the 2019 property taxes increase $300 above the 2018 property taxes as a result of the increase in the taxable value of the improvements. The total incentive would be $3,000 and would be paid on April 1, 2020.
Note: Your incentive payment may result in federal income tax consequences. You should consult your own tax advisor. All or a portion of your incentive payment may constitute taxable income regardless of whether you receive a Form 1099-MISC from the Town. If the amount of your incentive payment is $600 or more, you may receive Internal Revenue Service Form 1099-MISC from the Town.
If you have any questions regarding these requirements, please contact Development Services at 214-975-0472.