In Ohio, roughly two-thirds of all property taxes fund in local school districts, with the remaining funds spent on the many functions of County government. As the demand for more services increases and the overall cost of providing government services increases, property owners see their property tax bills rise. Property owners often have little idea how their property taxes are calculated and whether they are applied fairly to their property. In this article, I want to give you a brief overview of how property taxes are calculated and how a property owner who believes they are paying more than their "fair share" of property taxes can appeal to find out if this is the case.
THE PROPERTY TAX PROCESS – HOW ARE MY PROPERTY TAXES CALCULATED?
The County Commissioners are the County's taxing authority but share responsibilities at the County level with the Treasurer and the Auditor and the state level with the Ohio Tax Commissioner and the Board of Appeals.
The tax paid by each residential property owner is directly linked to the value of their property. Therefore, the more money a property would be worth on the open market if it were sold, the more taxes the owner pays annually. Commercial property tax value calculations are more complicated and will not be discussed in this article.
The County Auditor is responsible for determining the value of properties and applying for any appropriate tax credits due to the property owner. In addition, the Auditor develops an opinion on what the property's potential selling price would be on the open market between a willing seller and a willing buyer. This opinion based on available data is called the "true" value of the property.
This true value number is used to determine the assessed or taxable value of the land, which is 35% of the market value of the land and any improvements to the ground such as houses, barns, storage buildings, swimming pools or other artificial additions to the land.
This value is applied to the millage, which in the most basic terminology refers to the number of pennies per thousand dollars in taxable value the property owner must pay. The millage is the same for every taxpayer in the municipality, so the variable on how much property tax is paid is the property's true value/taxable value.
The Auditor's office has many tools at its disposal, but it would be impossible for the Auditor and their staff to have all of the critical data on every property in the County. There is simply too much data, and the data changes daily as properties are bought and sold, setting and resetting the value of similar properties nearby and across the County. Another scenario where property values might be incorrect in the Auditor's books is where a structure has been burnt out, removed, or demolished. Think of each sale as a rock thrown into a pond, and like the ripples fan out across the water, the values of numerous properties change with each real estate transaction.
The State of Ohio has created an appeal process to help property owners who believe that their tax bill is based on incorrect or incomplete data.
THE PROPERTY TAX APPEAL PROCESS
When a property owner believes they are paying more in taxes than the owner of a similar property owner, they can appeal the amount of their tax bill according to a process laid out in Chapter 5715 of the Ohio Revised Code. Each County has a Board of Revision, which is charged with hearing appeals of property tax values.
To initiate an appeal with the Board of Revision, property owners need to fill out a complaint form; the form used in most cases related to the value of a property is the DTE-1 form. You can get a document from the County Auditor's Office or online. This form must be completed and turned in between January 1 and March 31 in any given year.
The property owner has the burden of proof and must provide compelling evidence as to why the value is incorrect along with their contact information and any other evidence they have to present to the Board of Revision. It is helpful to have a copy of the real estate tax bill from the County Treasurer handy during this process.
What evidence can a property owner present to convince the Board of Revision to lower their property value and, in turn, reduce their property tax payment due? If possible, this evidence should be submitted with the appeal form but must be turned in at least ten days before the hearing before the Board of Revision.
· A record of an open market sale of the property in the last three years shows the sales prices as less than the appraised value listed on their Real Estate Tax Bill.
· A recently completed independent appraisal of the real estate is compelling evidence.
· A list of recent sales of nearby, similar properties. Similarities can include the property's age, square footage, and location.
· While not as convincing as an appraisal, a realtor's comparative market analysis of similar, recently sold properties can be used as evidence.
· Itemized professional estimates, receipts, or photographs establishing costs for fixing an issue on the property to show the property is not in as good condition as the Auditor's data might show.
The Board of Revision will set a hearing where the taxpayer will appear to discuss their appeal. Due to COVID19, many counties have used teleconference technology such as Zoom or Microsoft Teams to hold virtual hearings; others do these as telephone calls. However, traditionally these hearings were held in person at a County office.
The hearing will take 10-15 minutes. While a taxpayer may choose not to attend, and the Board can rely on the evidence presented, it is highly recommended that the taxpayer appears to discuss the matter with the Board members.
The Board of Revision will discuss the appeal and any evidence presented after the hearing. The Board will then issue a written decision within 90 days of the hearing. If the taxpayer is not satisfied, they can appeal the decision of the Board.
PAYING A FAIR SHARE
When the conversation turns to property taxes, most people agree they are paying too much. However, the process of appealing property taxes doesn't deal with the question of whether taxes are too much but whether they are "fair" compared to those paid by other property owners. The State of Ohio has created a process to help taxpayers when the County Commissioners, Treasurer and Auditor have incorrect or incomplete information to determine the values of properties. Those who believe they are paying an unfair amount of taxes should be encouraged to do a little homework and find out the true value of their property. They might find out it saves them a few hundred dollars or more, well worth their effort.
