Leah Curtis

A look at Ohio’s property tax system

As OFBF continues to focus on taxation issues, we hope to provide some more history and context for our members through a series of informational articles throughout the year in Buckeye Farm News.

Howard Fleeter, a tax expert who did a presentation in December at the Ohio Farm and Food Leadership Forum, said Ohio’s property tax system is one of the most complicated in the United States. Because of the complexity, and the interest from members, we will be starting with property tax subject areas as we work through this series. Look forward to more articles discussing millage, the HB 920 effect, rollbacks, school funding, levies and more in future issues of Buckeye Farm News.

Property Tax Overview

Prior to 1932, the state actually levied and collected taxes on real property. After that point, real property taxes were levied by local governments like they are today. It is important to remember that property taxes are a function of local governments and authorities, and other than laws governing the administration of property taxes, the state is not involved with real property taxation. All money collected from real property taxes stays within the local taxing district.

The Ohio Constitution provides some requirements for Ohio’s property tax system. First, the system must be uniform in rule, meaning the system must be uniformly applied to all types and classes of property unless otherwise provided by the Ohio Constitution. Language further provides that land be valued at its “true value in money,” which courts have determined is the fair market value of the real property. The Constitution also provides the General Assembly’s ability to grant property tax exemptions. There are essentially two major exceptions to these general principles in the Ohio Constitution:

1. Two classes of property were created by a constitutional amendment in 1980, one for residential and agricultural property and another for all other real property (commercial, public utility, etc.). This was done to allow for separate calculation of tax reduction factors.

2. Current Agricultural Use Value (CAUV), a different method of valuing property, is allowed for those properties that are “devoted exclusively to agricultural use.”

Ohio’s property tax system uses a three-year schedule to update values. The law requires a reappraisal be performed every six years in a county, and an update of those values be performed every three years after the reappraisal. The schedule rotates so that not every county is being re-evaluated or updated at the same time. For example in 2015, five counties will be reappraised and 19 counties will see values updated. While a reappraisal is typically more thorough, including an actual viewing of the property, an update is based entirely upon recent sales in the county.