Ohio General Assembly Passes Important Property Tax Reforms

Perhaps the most significant change in decades to Ohio’s property tax valuation contests has just been passed by the Ohio General Assembly, with the governor’s signature expected in the next weeks.

A m. Under. HB 126 was passed by both houses of the Ohio General Assembly on April 6, 2022, after extensive input from landowners, county auditors, and local subdivisions, including school boards. The bill, once signed and registered, will make sweeping changes to Ohio property tax law that will hopefully end practices that have kept homeowners in litigation for several tax years.

Below is a summary of the important aspects of the bill. It is likely that these changes will have a different impact on each owner, buyer, seller or tenant. Please contact your Vorys real estate tax lawyer to discuss your specific situation.

Bill limits the filing of property tax complaints by school boards and other subdivisions in cases where: 1) “the property was sold” in a recent arm’s length transaction within a year[1] before the tax year for which the complaint is filed, 2) the sale price is at least 10% and $500,000 more than the auditor’s value, and 3) the subdivision first passes a resolution authorizing the complaint. The $500,000 threshold is also indexed to increase each year with inflation. This ends the practice of retroactive tax increases attributable to the years in which a sale occurs.

  • For example, a property listed by a county auditor at $60 million sells for $64 million. The subdivision was unable to file an increase complaint on the sale. Although the sale price is $500,000 above the current value, the sale price is not at least 10% above the current tax value (and., equal to or greater than $6 million).

The bill also obliges the subdivisions to authorize the filing of the complaint beforehand. A notice must be sent to the owner at least seven days before the adoption of the resolution. It is still unclear what role the landlord can play in challenging the permission resolution before a complaint is filed. Your Vorys real estate tax lawyer will be able to study specific notice situations.

A m. Under. HB 126 Ends Private Wage Settlement Agreements between an owner and a school board after the date of coming into force of the bill. Under a private wage settlement agreement, the owner makes a settlement payment to the council to dismiss, not file, or settle a claim by accepting a new value for the property that is not on the tax list. This effective date of the private payment ban may create a brief window of opportunity for settlement based on private payment agreements. These opportunities may vary depending on the circumstances, so contact your Vorys real estate lawyer for more information.

Prohibition on a subdivision from appealing a Board of Review (BOR) decision to the Board of Tax Appeals (BTA). Their only chance is at the BOR. The bill is silent on whether a subdivision could appear as a respondent in an appeal by the BTA against a decision of the Board.

Other modifications adopted in Am. Under. HB 126 includes:

  • Removed requirement for school districts to receive notice of complaint.
  • Changed the time frame in which school districts can file a counter-complaint to 30 days after the initial complaint is filed. Currently, a school district can file a counter-complaint within 30 days of receiving notice of the complaint from the landlord.
  • A requirement that a county BOR dismiss a complaint filed by a subdivision within one year of the filing of the complaint if the BOR does not issue a decision by then.

A m. Under. HB 126 clarifies that its amendments apply to complaints or counter-complaints filed for the 2022 and subsequent tax year, except that the provisions of the bill regarding private payment agreements apply to such agreements entered into at from the date of entry into force of the bill. The governor’s position on the bill would be favourable.