Changes in Homestead Exemption Regulations
Between 2007 and 2013, all seniors qualified for the homestead exemption regardless of their income. However, recent changes now exclude current recipients and set a $30,000 income cap for future applicants. Previously, the limit stood at $40,000.
The budget analysis highlights an important distinction: to qualify for the local option exemption, homeowners must adhere to income guidelines which are stricter than those for the standard state homestead exemption. Essentially, individuals earning above $40,000, even if they qualify for the standard exemption, will not be eligible for the local option.
This exemption protects the initial $28,000 of property value from taxes, but it is only accessible to homeowners aged 65 or older, or those who are permanently and totally disabled. Notably, there are no income restrictions for disabled veterans and the surviving spouses of veterans who died in service.
Nix mentioned that her office is sending out income verification documents to current beneficiaries, referred to as “grandfather” beneficiaries, with a deadline of December 1. She expressed concern that these individuals may be upset, as they previously did not have to meet income requirements.
According to Nix, while the income levels of around 8,000 grandfathered recipients will be examined—leading to potential disqualifications—these individuals won’t lose their state benefits.
Recently, commissioners approved a substantial tax reduction of $20.1 million for the upcoming year, which includes a plan to double the homestead benefit. Initially, this was projected to save taxpayers roughly $7.6 million. However, some individuals may find themselves ineligible based on income thresholds, yet it’s unclear how many will actually be affected at this point.
Moreover, the initiative aims to cut housing costs by about 50%, providing taxpayers with approximately $100 in savings for every $100,000 of home value.
The homestead provision was the only property tax reform measure that Governor Mike DeWine did not veto. The state budget also permits county commissioners to basically double the 2.5% owner occupancy credit, although they are primarily focusing on the homestead exemption.
Rep. David Thomas, who previously served as an auditor in Ashtabula County and played a role in shaping property tax reforms within the House Republican leadership, introduced these changes through House Bill 335 before budget discussions began.
He acknowledged that while some individuals may be disqualified due to complexities in income verification, the changes are generally geared toward assisting those who need it most. “This still benefits the vast majority of Homestead recipients,” he noted, adding that the adjustments would lead to more tailored savings for those eligible.
Notably, Butler County was the first in Ohio to implement this homestead benefit. The Ohio County Commission observes the adoption of these benefits across various counties. Counties like Holmes and Lorain have also supported similar homestead exemptions, while others such as Erie, Medina, Richland, and Warren are contemplating the initiative, according to the CCAO tally.
