Ohio Real Property Tax – Ohio severely restricts school districts’ rights to challenge property values

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Buckingham, Doolittle & Burroughs, LLC

Recently-enacted HB 126 significantly alters the rights and procedures for local school districts (among other government entities) to contest property valuations for real property taxes. The changes described below will affect current and future valuation complaints and appeals. Accordingly, this is an opportune time for property owners to review their approach to property taxes and potential savings.

This new legislation limits the rights of local school districts to file real property tax valuation complaints. These local challenges to property value would only be permitted if:

  1. The property was sold in an arms-length transaction in the year before the tax lien date for the year for which the complaint was filed;
  2. The sale price exceeds the assessed value by 10% AND $500,000 (adjusted for inflation); and
  3. The school district’s board passes a resolution authorizing the complaint and gives at least seven days’ notice to the property owner of the meeting where the resolution will be discussed.

O.R.C. 5715.19(A)(8). It seems this is aimed to curb the cottage industry that has developed with school districts filing numerous valuation complaints greatly increasing the aggravation and cost to property owners.

If the property owner files an original complaint requesting a reduction in value greater than $17,500, the local school district may file a counter-complaint and participate in the proceedings. However, school boards will no longer receive mandatory notice of property owners’ complaints, presumably reducing the number of counter complaints as the effort to identify complaints increases. These changes in procedure take effect with the 2022 tax year (for complaints filed and taxes payable in 2023).

Further, local school districts will only have a single chance to prevail on their valuation complaints. Effective July 19, 2022, school districts will no longer have the right to appeal a Board of Revision decision to the BTA unless they own the subject property. The new law will also outlaw “private pay” agreements where property owners agree to pay the school district in exchange for withdrawing a complaint or agreeing not to file one.  Op. Att’y Gen. 2018-011.

These procedural changes not only limit the rights of the school districts, but also create unique planning opportunities for real estate sales and valuation complaints to prevent any challenges to the property’s tax value. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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