A municipal development program enabling a city to use the additional property taxes that a development project generates to finance land acquisition, demolition and other costs necessary for that development to occur. Usually the issuance of a bond is necessary to finance these up-front costs.
Bonds are repaid by the extra taxes that are generated by the new development and construction. The taxes captured to repay the bonds go to the TIF district instead of going to all the taxing districts that normally levy a tax on the property. Properties with the same market value, class and area will pay the same tax even if one is in a tax increment district and the other is not.
Dakota County Tax Increment Financing Policy