What are the incentives?
The Renaissance Zone Program includes two (2) primary incentives, which include the possibility of property tax and income tax exemptions for qualified projects as well as opportunities to pursue historic preservation and renovation tax credits.
As a general overview:
- New Construction and Rehabilitation
The tax credit is equal to 100% property tax exemption on the value of the building (excludes land) is exempt from taxation for the first five taxable years after the taxable year in which construction is completed and the residence is owned and occupied for the first time.
- Business or Investment Properties
Five (5) year, up to 100% exemption on any tax on income derived from the business or investment location (up to $500,000 per taxable year).
If, during the five-year exemption period, the taxpayer changes the use of the zone project property from business or investment use to personal use, the taxpayer is ineligible for the exemption starting with the first day of the month in which the change occurs.
- Residential Purchase
The tax credit is equal to $10,000 per year over a five-year credit period. The five-year credit period is a period of sixty consecutive months, consisting of five 12-month periods.
The tax credit is equal to 100% property tax exemption on the value of the building (excludes land) is exempt from taxation for the first five taxable years after the taxable year in which construction is completed and the residence is owned and occupied for the first time.
- Commercial/Tenant Leases
Tenant Leases (project must be within a building that has been approved as a RZ project) – Five (5) year, 100% exemption on any tax on income derived from the business location (up to $500,000 per taxable year)
If you have questions regarding your specific Renaissance Zone property tax exemption contact the City of Fargo Assessors Department.
A more detailed guideline of the income tax incentives available under the North Dakota Renaissance Zone can be found here Incentive Guidelnies
Historic Preservation and Renovation Tax Credits
- North Dakota Historic Property Preservation Tax Credit – a credit against state tax liability of 25% of the amount invested up to $250,000. For additional information, visit http://www.history.nd.gov/hp/ and http://history.nd.gov/hp/taxapplyrenaissance.html
- Federal Historic Rehabilitation Tax Credit – federal income tax credit of 20% of the amount invested for certified rehabilitation and certified historic structures. For additional information, visit http://nps.gov/tps/tax-incentices.htm
Renaissance Zone Funds
As established in state law (N.D.C.C. 40-63-07) a Renaissance Zone Fund (RZF) organization is an entity established by the local zone authority for the purpose of raising funds to finance zone projects. For investors, the amount of tax credit (state tax liability) is equal to 50% of the amount invested during the taxable year. A RZF may invest in any residential, commercial or infrastructure projects in the zone or in any designated Renaissance Zone city.
Other City of Fargo Business or Investment Incentives
For additional information or questions on the Renaissance Zone Program, please contact the City of Fargo Planning and Development Department or call 701.241.1474.