In April, Governor Mike DeWine signed House Bill 126 that will severally limit local school boards from participating in the real property tax appeal process. Beginning July 21, 2022, property owners will retain their existing rights to seek reductions in property tax values, but school boards and other interested third parties will be faced with an uphill battle to seek higher property valuations.
Taxes on real property in Ohio are based on the value of owned land and any improvements constructed thereon. These taxes are paid in arrears by the individuals or other legal entities that own that property. For example, property taxes that accrued in 2021 are now due and payable in 2022 (separated into two payments for the first and second half of year).
By and large, property taxes levied in Ohio go to fund local schools. Generally, schools obtain more funding when local property valuations are higher, and so schools have a particular interest in challenging property taxes to achieve higher valuations. Until the passage of HB 126, school boards have been empowered to more broadly file original complaints to challenge existing property values in an effort to generate more property tax revenues. However, that will soon change.
The new regime for challenging property valuations, as prescribed by HB 126 and which will be set forth in an amended Chapter 5715 of the Ohio Revised Code come July 21, 2022, amends the process by which school boards and other local governing bodies can raise challenges to existing valuations. Pursuant to these changes, the legislative authority of a subdivision, the mayor of a municipal corporation, or a third-party complainant (such as a school board) cannot not file an original complaint concerning property that the complainant does not own or lease unless both of the following conditions are met:
- The property was sold in an arm’s length transaction; and
- The legislative authority or school board complainant first adopts a resolution authorizing the filing of the original complaint at a public meeting after mailing notice to at least one of the record owners of the disputed property.
School boards and other interested parties will be precluded from filing counter-complaints unless an original complaint from the applicable property owner states an amount of overvaluation, undervaluation, discriminatory valuation, illegal valuation, or incorrect determination of at least $17,500 in taxable value.
In addition, HB 126 prohibits school boards and other interested parties from appealing a Board of Revision decision unless it concerns their own property. Property owners, on the other hand, will maintain their right to appeal a Board of Revision decision to either a Court of Common Pleas or the Board of Tax Appeals.
All told, this is a big win for Ohio property owners.
The attorneys in McCarthy Lebit’s Real Estate Law practice group are continuing to stay apprised of the developments relating to real property taxes in Ohio. To learn more about the latest developments or for any real estate related questions, please reach out to request a consultation, visit Adam or Jack’s bio for their contact information to reach out to them directly, or call us at 216-696-1422
