What is LERTA?

Local Economic Revitalization Tax Assistance (LERTA) is a tax abatement program created by the Commonwealth of Pennsylvania in 1977 authorizing local taxing authorities to provide tax exemption. The purpose of the legislation is to incentivize redevelopment of aging or deteriorating properties. The Borough of State College is considering adopting legislation to allow for a graduated increase in tax payments on improvements to properties in the historic downtown core of the community. LERTA does require an application and approval of the graduated 10 year tax abatement for the property.

Overview of LERTA

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Picture1What Properties Qualify?

  • Properties within the LERTA District shown in the map below and highlighted in orange.
  • These properties are listed in the 1982 Centre Regional Planning Commission report “Historic Resources of the Centre Region”. The purpose of the report was to inventory select historic buildings within the Centre Region. The LERTA ordinance reinforces the preservation and adaptive reuse of these buildings by recognizing their value to the downtown.
  • There are 27 eligible properties which exist from the 1982 inventory.
  • Improvements subject to the tax abatement may only be for commercial (non-residential) use.
  • Improvements subject to the abatement may only be for rehabilitation or adaptive reuse of the structure. The building may not be demolished.

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How does the Tax Abatement Work?

  • All properties listed in the LERTA District are assessed and taxed. When one of the eligible properties is improved the property is reassessed and a new value is placed on the property.
  • Eligible projects must have a proposed improvement in excess of $75,000 in value.
  • Once the improvement value is established LERTA allows property owners to pay abated property taxes for a period of 10 years. Please see table below for the percentage of improved assessed value to be abated, by year after the initial certificate of occupancy.Annotation 2019-05-02 111522
  • An application for exemption from real estate taxes may be made at any time within five (5) years from the effective date of this ordinance. Only five applications for LERTA tax abatement will be accepted per year.

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