Tonganoxie might soon have its own stimulus package to help spur new home construction and sales.

On Monday night, the Tonganoxie City Council unanimously voted to have city staff draft an ordinance that would allow the city to rebate building permit fees to buyers of new homes and rebate some property taxes for improvements on older homes.

In Tonganoxie, the cost for a building permit is around $6,000 for a $220,000 home.

Kathy Bard, assistant city administrator, calculated it would take a little more than seven years for the city to recoup the money lost from the permit rebates with property taxes at the current mill levy. But she also mentioned the city would still earn around $3,000 in sales taxes from the materials cost of the home.

Council President Jason Ward did not like the idea of waiting seven years to recoup the building permit money and suggested the city only rebate about $3,300 in permit fees, which could then be recouped by the sales tax from materials.

“That might give us an opportunity to compromise and not put ourselves in a position where the recruitment period is longer than we would like it to be and it would still allow our community to advertise an incentive,” Ward said.

The council decided that only 10 building permits would be allowed in this program in its first year.

City leaders hope that people will take advantage of this program and the federal homebuyer tax credit to buy a new home in Tonganoxie.

There are also incentives for older homes.

In a previous meeting the council agreed to include all areas of Tonganoxie not in a new subdivision as part of a neighborhood revitalization area.

A home remodeling project that would increase the home’s value by a minimum of $5,000 would be eligible for a 95 percent rebate on property taxes on the increased value of the home for the first three years and then a 50 percent rebate each of the next three years after that. If an older home were torn down and a new home of at least $120,000 in value built in its place, the buyer would be eligible for the same property tax rebate for the difference in home value.