Tax Increment Finance:
The Edinburgh Experience
Greg Ward
The City of Edinburgh Council
We have reached the end of the
public sector funding road
Clear call to arms to promote
new models
Scottish Context: Public Sector
can’t afford it anymore
“Westminster cuts to the
Scottish Budget have
emphasised the importance
of finding new funding
models to deliver crucial
infrastructure projects such
as the Edinburgh
Waterfront, that can unlock
further economic
development, whilst
ensuring maximum value
for the public purse.”
John Swinney, MSP Cabinet Secretary for Finance and
Why the Waterfront?
307 hectares of mixed use development potential
Edinburgh’s TIF
Business Case
Key Objectives of Tax
Incremental Finance
Key Objectives of Tax
Incremental Finance
The Taxation Increment
Financing (“TIF”) Mechanism
4. The captured revenues
and income are used to meet
debt repayments
1. CEC finances the delivery of
development and regeneration
projects
The ‘Virtuous
Circle’
3. The TIF mechanism captures the
related incremental business rate
revenues
2. Financed projects deliver
growth and enable private
sector development
©
TIF Financial Model
£
n
me
t
Assessed Value (AV)
p
rom
f
V
elo
v
De
Incremental
A
Asset Value
d
e
s
Incremental uplift in
rea
c
n
I
property taxable value
belongs to TIF authority to
pay project costs
New PostProject Asset
Value
Total AV now
belongs to all
other assets in
project area
Base Asset Value
Asset Value belongs to all other assets in project area
5
Created
10
15
25 year TIF
Time
20
Terminated
Key steps in the TIF
Development Process
TIF Business
Case now
Finalised
Edinburgh’s
TIF:
Key Assets for
Delivery



Edinburgh’s TIF:
Financial/Economic Appraisal
Edinburgh’s Waterfront
unlocked
Is TIF applicable elsewhere?
Spatial focus on four Strategic
Investment Zones
City Centre
Edinburgh Waterfront
West Edinburgh
South Edinburgh
The Future of TIF
www.investinedinburgh.com