The recently enacted HB 126 significantly changes the rights and procedures for local school districts (among other government entities) to challenge property assessments for property taxes. The changes described below will affect current and future assessment complaints and appeals. Therefore, now is the time for property owners to review their approach to property taxes and potential savings.
This new legislation limits the rights of local school districts to file property tax assessment complaints. These local land value challenges would only be permitted if:
- The property was sold in an arm’s length transaction within the year prior to the date of the tax lien for the year for which the complaint was filed;
- The sale price exceeds the assessed value by 10% AND $500,000 (adjusted for inflation); and
- The school district board passes a resolution authorizing the complaint and gives at least seven days notice to the owner of the meeting where the resolution will be discussed.
ORC 5715.19(A)(8). It appears to be aimed at curbing the cottage industry that has grown with school districts filing numerous assessment complaints, dramatically increasing aggravation and costs for homeowners.
If the owner files an initial complaint seeking a write-down of more than $17,500, the local school district can file a counter-complaint and participate in the proceedings. However, school boards will no longer receive the mandatory notice of landlord complaints, which will likely reduce the number of counter-complaints as efforts to identify complaints increase. These procedural changes take effect from tax year 2022 (for complaints filed and taxes due in 2023).
Additionally, local school districts will only have one chance to prevail on their evaluation complaints. Effective July 19, 2022, school districts will no longer have the right to appeal a board of review decision to the BTA, unless they own the property in question. The new law will also prohibit “private payment” agreements where landlords agree to pay the school district in exchange for withdrawing a complaint or agreeing not to file one. Op. Att’y Gen. 2018-011.
These procedural changes not only limit the rights of school districts, but also create unique planning opportunities for real estate sales and appraisal complaints to avoid challenges to the tax value of the property.