While Ohio law presumes that all real estate is taxable, hospitals can achieve substantial tax savings by seeking exemption from real property taxation for property they own and use to provide health care services pursuant to a charity care policy.
Hospitals can seek exemption from real property taxation beginning with the first year following the year the hospital acquires a property. They can also apply for a refund of taxes for up to three preceding years (if a property has been continuously owned and used for charitable purposes during that time). A hospital must own and use the property for qualifying purposes as of the January 1 “tax lien date” to achieve exemption for any tax year.
Importantly, once a hospital has achieved exemption, the property continues to remain exempt until the county returns it to the tax list. In other words, hospitals do not need to refile for exemption annually for property that is already exempt.
A hospital should file a property tax exemption application when:
- The hospital acquires new real estate;
- The hospital adds new construction to previously exempt real estate; and
- The hospital owns any other real estate that is currently taxable.
As property owners, hospitals bear the burden of proving their qualification for tax exemption. Hospitals are advised to review the tax bills for all of their properties annually to determine if all or a portion of the parcels they own may be eligible for tax exemption.
The annual deadline for filing real property tax exemption applications is December 31.
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