Land Use & Zoning

A Virginia locality creates a tax increment financing (TIF) district to fund infrastructure in a blighted area. TIF works by:

ARaising everyone's property taxes in the TIF district
BCapturing the future tax revenue increase (increment) generated by rising property values after redevelopment to repay infrastructure bonds✓ Correct
CAllowing developers to pay no taxes for 10 years
DUsing federal grants to supplement local tax revenues

Explanation

TIF captures the difference (increment) between the property taxes collected before and after redevelopment. The tax increment is pledged to repay bonds used to finance infrastructure improvements, without raising tax rates.

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