TIF Districts can only be created by municipal government and can exist for up to 23 years. A project must be located within a TIF District to receive TIF Funding.
During the life of the district, TIF Financing allows a developer or property owner to receive a portion of the increased real estate taxes generated from a rehabilitation or new construction project.
TIF Funds usually are a small portion of the overall project costs and are meant to close the gap between conventional bank financing, the owner's funds and the project's costs. TIF Funds often make previously infeasible development projects possible.
TIF Districts do not raise real estate taxes; rather, TIF Districts capitalize on the increased revenues generated by the development and general improvement within the TIF District boundaries. A TIF designation merely permits any additional property tax revenue to be earmarked for improvements within the district.