Tax allocation district

A tax-allocation district (TAD), also known as tax increment financing, is a defined area where real estate property tax monies gathered above a certain threshold for a certain period of time (typically 25 years) to be used a specified improvement. The funds raised from a TAD are placed in a tax-free bond (finance) where the money can continue to grow. These improvements are typically for revitalization and especially to complete redevelopment efforts.