Abatement

What is 'Abatement'

Abatement is a reduction in the level of taxation faced by an individual or company. Examples of an abatement include a tax decrease, a reduction in penalties or a rebate. If an individual or business overpays its taxes or receives a tax bill that is too high, it can request an abatement from the tax authorities.

BREAKING DOWN 'Abatement'

A common type of tax abatement is property tax abatement. Individuals who believe that the assessed value of their property is too high, can appeal to their local tax assessor for a tax abatement. Some localities offer property tax abatement to owners who restore, or improve, historic properties located in designated neighborhoods. Some types of properties, such as those containing non-profit businesses, will be granted tax abatements based on the owner's tax-exempt status.

RELATED TERMS
  1. Property Tax

    A tax assessed on real estate by the local government. The tax ...
  2. Tax Base

    The assessed value of a set of assets, investments or income ...
  3. Direct Tax

    A tax that is paid directly by an individual or organization ...
  4. Taxes

    An involuntary fee levied on corporations or individuals that ...
  5. Tax Liability

    The total amount of tax that an entity is legally obligated to ...
  6. Tax Break

    A tax break is a savings on a taxpayer's liability. A tax break ...
Related Articles
  1. Personal Finance

    Your Property Tax Assessment: What Does It Mean?

    The amount of a property tax bill is based on the property’s value, the exemptions it qualifies for, its use and the local property tax rate.
  2. Personal Finance

    Understanding Taxes

    Taxes are mandatory fees that individuals and corporations must pay to their governments.
  3. Personal Finance

    How Much Tax Do You Really Pay?

    When you add direct and indirect taxes together, your real tax rate is much more than you expected.
  4. Personal Finance

    4 Little-Known Ways to Reduce Your Property Taxes

    Property taxes are often expensive and most don't know they can be appealed. Here are little known ways you can try to reduce your property tax liability.
  5. Investing

    Calculating Net of Tax

    Net of tax is a figure that has been adjusted for taxes.
  6. Personal Finance

    Do Tax Cuts Stimulate The Economy?

    Learn the logic behind the belief that reducing government income benefits everyone.
  7. Personal Finance

    Why America's Taxes Are Too Low

    The solution to America's economic woes may not be in lowering taxes further, but may, in fact, lie in increasing them.
  8. Personal Finance

    Tax Haven Vs. Tax Shelters: Is There a Difference?

    Learn about the difference between tax havens and tax shelters, and how both are used to reduce tax liability or avoid paying taxes altogether.
  9. Personal Finance

    5 Most Taxing Taxes for Americans

    There’s not much that unites Americans like their hatred of taxes. Here's a list of taxes we dislike the most.
  10. Personal Finance

    Explaining the Tax Base

    A tax base is the value of assets, investments or income streams that a government can tax.
RELATED FAQS
  1. When might an abatement be granted by the IRS?

    Learn how the IRS may grant an abatement request when a reasonable cause is present or undue hardship is imposed on a taxpayer ... Read Answer >>
  2. When might a business incur abatement costs?

    Discover when a business might incur abatement costs; learn examples of such costs and why abatement costs affect a company's ... Read Answer >>
  3. What are the differences between regressive, proportional and progressive taxes?

    Understand the differences between the most common tax systems including regressive taxes, proportional taxes and progressive ... Read Answer >>
  4. What's the difference between the marginal tax rate system and a flat tax?

    Find out about the difference between marginal tax rates and flat taxes. Gain insights on both systems and the arguments ... Read Answer >>
  5. In which US cities do high-income earners pay the most tax?

    See which U.S. cities punish high net worth individuals the most through the highest levels of income taxes, property taxes ... Read Answer >>
  6. Is progressive tax the same thing as marginal tax rate?

    Learn how a marginal tax rate is a form of a progressive tax rate. Learn the pros and cons of such a tax policy and who may ... Read Answer >>
Hot Definitions
  1. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  2. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  3. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  4. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  5. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
  6. Security

    A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship ...
Trading Center