Land Use & Zoning

In Kentucky's Urban Renewal areas, Tax Increment Financing (TIF) works by:

AReducing taxes for homebuyers in the area
BUsing the additional tax revenue generated by new development to finance public improvements in the area✓ Correct
CProviding direct grants to developers
DExempting developers from property taxes

Explanation

TIF captures the increase in property tax revenue (the 'increment') generated by new development within a designated district and uses it to repay bonds that financed public infrastructure improvements.

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