Property tax abatements, exemptions, and reductions are subsidies that lower the cost of owning real and personal property by reducing or eliminating the taxes a company pays on it. ''Real property'' is land and all the things that are attached to it, such as buildings. ''Personal property'' is everything else - those things that are not dug into the land or nailed down - such as machinery.
When a company receives a property tax exemption, it pays no taxes at all for the length of the deal. When a company receives a property tax abatement, its taxes are abated (reduced) by a certain percentage for however long the deal lasts.
For capital-intensive companies (companies that require a large of investment of money in land, buildings, and machinery) such as manufacturers, property tax abatements can be one of the most lucrative subsidies. It is not uncommon for a tax abatement deal to last up to 30 years.
