Tax Abatements

Five-Year Tax Abatement

A Tax Abatement may be available to qualified property owners since Ocean City has adopted an authorizing ordinance. 

Under the law, the ordinance that provides a tax abatement is applicable to the following:

1. Residential Dwellings: The city determines to provide for the exemption from taxation the improvements to all residential dwellings in the Historic District. If the improvement results in a change in status from a key or contributing to a noncontributing structure as determined by the Historic Preservation Commission, it is not eligible to receive the abatement.
   
   
2. Commercial Structures in the Historic District: The city determines to provide for the exemption from taxation the improvements to commercial and mixed use structures in the Historic District.
   
   
3. Commercial Structures in the Central Business and Central Business-1 Zones: The city determines to provide for the exemption from taxation the improvements to commercial and mixed use structures in the Central Business and Central Business-1 Zones.  The exemption for mixed use structures is limited to those structures meeting the definition of mixed use in subsection 25-205.1.2 and subsection 25-205.1A.2 “Permitted Uses.”  With any improvement or construction in the Central Business and Central Business-1 Zones, the total square footage to be used for commercial purposes on the site cannot decrease.

The exemption shall be granted for a five-year period, during which time the taxable value of the property shall not increase by the value of the improvement, notwithstanding that the value of the property to which the improvement is made is increased thereby.   During the exemption period, the assessment on the property shall not be less than the assessment thereon existing immediately prior to the improvement unless there is damage to the structure through action of the elements sufficient to warrant a reduction.

To apply, follow instructions on Form E/A-1 (the form is linked below) and file within 30 days of completion of the improvement, conversion or construction with the tax assessor. Please see the Ocean City Tax Abatement Ordinance for additional information, including information on the application procedure and the application requirements.

Application for Five-Year Exemption and/or Abatement