Deadline to Challenge Property Tax Valuations Looms

The April 1st deadline to file property tax challenges is rapidly approaching. Recent tax years have seen historically large property value increases. So, it is more important than ever to ensure your property is appropriately valued. And, because so many counties just set new tax values for the next three years, challenging your property value ensures that any reduction will remain in place for the entire three-year period, resulting in year-over-year tax savings.

Additionally, the property tax appeals process remains very favorable to taxpayers. Under old law, both taxpayers and school districts had broad authority to file appeals of county Board of Revision (BOR) decisions to the Ohio Board of Tax Appeals (BTA). Now, under House Bill 126, only taxpayers can appeal adverse decisions.

What is Driving Property Value Increases?

A hot real estate market statewide has spurred some of the largest property value increases in Ohio’s history. Ohio counties are on a six-year appraisal cycle. Each County Auditor reappraises every property countywide once every six years and conducts a market-based value update at the three-year midpoint. Last year, almost thirty counties underwent a full reappraisal with another dozen conducting value updates. Each experienced massive increases in property values across the board.

Some of the largest and fastest growing counties in the state underwent reappraisals in 2023. In Central Ohio alone, Delaware (33% avg. increase countywide), Franklin (35%), Licking (36%), Morrow (39%), and Pickaway (30%) counties were all reappraised. In the words of Franklin County Auditor Michael Stinziano, these increases are “eye popping.”[1] Other major counties that were reappraised include Geauga (29%) and Hamilton (28%). Large counties that experienced their triennial update include Montgomery (30%) and Summit (31%).

Many of these increases were spurred by the booming residential real estate market despite commercial properties lagging behind. This has not stopped taxing authorities from pushing significant value increases regardless of property class. Brick and mortar retail continues to struggle in the face of competition from online vendors. Hotels also face headwinds due to the growing presence of short-term rentals. Even the once hot industrial and warehousing properties are also experiencing slowing rental rates and sales.

Perhaps the worst-performing sector is office space with the market on pace for one of its roughest years yet with decreasing rents and demand, low sales prices, and soaring vacancies. A lingering symptom of the pandemic, regular work from home is keeping office demand low, and employers are beginning to downsize their office needs.

Locking in a Reduction at the Board of Revision (BOR)

Thanks to House Bill 126, passed in 2022, any reduction you receive at the BOR may not be challenged by the school district. This is because the new law takes away school districts’ rights to appeal a BOR decision to the BTA.[2] So, the school district’s only chance to sustain a taxpayer’s higher value is at the BOR. This provides taxpayers with an opportunity to present strong evidence of a lower value to the BOR, achieve a reduction, and conclude the complaint process.

In contrast, taxpayers still have the right to appeal an unfavorable decision to the BTA. (Taxpayers also maintain the alternative right to file these appeals at the local common pleas court.)

House Bill 126 has allowed the property tax appeals process to become the most favorable it has ever been for taxpayers. This presents a prime opportunity to challenge any significant increases in property values. But remember, the deadline to file a BOR complaint is April 1st

If you have any questions or would like to discuss the information provided in this Client Alert in more detail, please do not hesitate to contact us.

Please feel free to contact us with questions or for additional information.

Harlan Louis, at hlouis@baileycav.com or (614) 229-3225

Nicholas Baker, at nbaker@baileycav.com or (614) 229-3275

[1] Franklin County home values jump average 41% in reappraisal – see how much your area rose, The Columbus Dispatch, July 6, 2023

[2] A few school districts are challenging House Bill 126’s constitutionality. We are monitoring these cases and we do not expect the constitutional challenges to prevail.

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