Recent changes in Ohio’s real property tax laws enhance the ability for property owners and certain commercial/industrial tenants to challenge the valuation of their property. Real Property Tax Valuation Complaints to reduce 2022 property tax bills are due March 31, 2023.
A taxpayer who believes the county assessment is too high, or that the value of their property declined, may contest the valuation and reduce the taxes owed by establishing a lower valuation is warranted. This often includes retaining an appraiser to provide their opinion of the reduced valuation. However, there are other methods for supporting a lower valuation even without obtaining an appraisal, especially if the property was recently transferred, the property’s vacancy rate has increased, or there is significant personal property included in the valuation. Each Ohio County reappraises or revalues property values every three years. In Northeast Ohio for 2022, Columbiana and Holmes County properties were reappraised, while Carrol and Medina County values were updated. Property owners in these counties should be especially aware of the increases in their property taxes.
Additionally, real property values are automatically adjusted in Ohio when property is sold or transferred. However, property values based upon recent transfers are often inflated when significant value for personal or intangible property was transferred as part of the sale. Thanks to a recent change in Ohio law, certain commercial and industrial tenants that are responsible for real property taxes (for example, tenants under triple-net leases) are now able to contest the valuation of their leased property with the property owner’s authorization.
Commercial tenants, especially those impacted by a casualty or change in occupancy among subtenants, should not miss the opportunity to lower their property taxes and reduce overall operating expenses. Further, effective July 21, 2022, Ohio House Bill 126 significantly limited local school boards’ ability to file a complaint to increase property values. Under the new law, a school district can now only challenge a property’s valuation if the property was sold in a recent arms-length transaction prior to the applicable tax lien date (i.e. January 1, 2022) and the sale price exceeds the county’s value by 10% and at least $500,000. There are also new administrative and notice procedures that a school district must follow prior to challenging a property’s value. Nonetheless, it is believed that not all school districts are voluntarily complying with these new requirements.
