Tax Allocation District (TAD)

Font Size: + -

Feedback Print

A tax-allocation district (TAD), also known as tax increment financing, is a defined area where real estate property tax monies gathered above a certain threshold for a certain period of time (typically 25 years) is used for a specified improvement. The funds raised from a TAD are placed in a tax-free bond where the money can continue to grow. These improvements are typically for revitalization and to complete redevelopment efforts in a specified area. Douglasville citizens approved a TAD in 2019.

To see if your home or business is in the Douglasville TAD, enter your address here (Please be sure to use abbreviations for Street and Road).

FAQs

Do I pay a higher tax rate if my property is in a TAD district?

No, the millage rate in a TAD is the same as outside the district. There is no additional assessment charge in TAD like there would be in a CID or special taxing district.
How do private developers benefit from TADs?

Creating a TAD allows for future tax revenues generated by a redevelopment project to be used to help pay for some of the costs of building the project. Usually, TAD bonds are used to either pay for public improvements to enhance a project or to help reduce the higher costs and risks of investing within a blighted area. TADs are often used to help pay for demolition of existing buildings, expensive water or sewer upgrades, parking structures, new roads, streetscape improvements or other extra costs that otherwise make private redevelopment financially unfeasible.
How is a TAD area created?

If the TAD referendum passes, the local governments are authorized to form one or more TAD districts consistent with the requirements of Georgia’s Redevelopment Powers Law. That is accomplished by designating a TAD boundary and preparing a TAD Redevelopment Plan to act as the business plan for the operation of the district. The plan is discussed at two public hearing and then must be approved by a resolution of the local government. Once the resolution is passed, the taxable value in the TAD is “certified” as the base value of the district.
How is it decided which tax increments go into the TAD Special Fund to pay off bonds?

Georgia law allows for ad valorem taxes on real estate, personal property (i.e. business machinery and equipment) and some sales taxes to be pledged as increments to repay TAD bonds. In most cases communities only pledge tax increments on real estate when setting up TADs. As a result, local budgets often continue to receive new revenues from within TADs from personal property value growth, new business licenses, etc.
What does the TAD referendum authorize?

The Redevelopment Powers Law requires that local communities authorize by referendum the use of tax allocation districts in their communities. Approval of the referendum gives local governments the right to form one or more TADs, but it does not form any districts or grant the incentive to a project or projects.
What happens to the property taxes already being collected in the TAD district when it’s formed?

The taxes collected by the city, county and school system as of the date the TAD is formed continue to go to those taxing districts over the life of the TAD.
What is a Tax Allocation District and how does it work?

A tax-allocation district (TAD), also known as tax increment financing, is a defined area where real estate property tax monies gathered above a certain threshold for a certain period of time (typically 25 years) to be used a specified improvement. The funds raised from a TAD are placed in a tax-free bond (finance) where the money can continue to grow. These improvements are typically for revitalization and to complete redevelopment efforts in a specified area.

Georgia’s Redevelopment Powers Law was adopted by the general assembly in 1985 and gives local governments (cities and counties) the authority to sell bonds to finance infrastructure and other redevelopment costs within a specially defined area, a tax allocation district or TAD. The bonds are secured by a “tax allocation increment” which is the increase in the property tax revenues resulting from redevelopment activities occurring. As public improvements and private investment take place in a TAD, the taxable value of property increases. The city/county collects those revenues, putting the increase due to the new investment into special fund to pay off bonds or loans that financed the public improvements in the district.
What is the “Halo Effect” related to TADs?

One of the chief benefits of TADs and tax increment financing in general is the “halo effect” that often results from implementing a successful TAD redevelopment project. The halo effect refers to the increase in investment activity and property tax digest which can occur in an area surrounding and outside of a successful TAD. Halo effects can occur either because new economic activity is attracted to an area where it did not previously exist, or major barriers to private investment (such as vacant blighted buildings) are finally removed. Since people like to invest where other investments are occurring, property values in areas surrounding a successful TAD also tend to increase over time. Surrounding investments and resulting new taxes from the halo effect can partly offset or sometimes exceed the “loss” of tax increments dedicated to the TAD itself. Significant halo effects have been observed in and around TAD projects in Atlanta, East Point, Acworth and other jurisdictions.

More FAQs

Businesses, it's time to renew your Alcohol License for 2025.

Find out how.

City of Douglasville, GA

Search Box - Custom Content

Tax Allocation District (TAD)

FAQs