A TIF is a successful economic development tool used by many municipalities across Illinois. The purpose of a TIF is to promote redevelopment that would not otherwise take place. When a TIF is established, the “equalized assessed value” (EAV) of all the properties within the TIF District is frozen throughout the TIF’s duration, which is typically 23 years. Property taxes going to the municipality and other taxing bodies are then based on this frozen EAV. Any additional property taxes generated by an increase in the EAV over time (the increment) will go into a TIF fund, which the municipality can use to incentivize new development and construct public structures and amenities.
When a TIF expires, all of the properties within the TIF go back on the tax rolls at their full assessed value, which means taxing bodies benefit from the new revenue they now receive thanks to the TIF-related development.