Ohio’s Property Tax Overhaul: What to Expect

COLUMBUS, Ohio — A new $3 billion plan in Ohio aims to transform property taxes, with a focus on reducing some bills, revising how taxes are computed, and curbing the drastic tax increases that have hit homeowners lately.

However, the immediate benefits may not be so obvious. These changes are set to be implemented over several years, making it a gradual process.

For instance, certain adjustments will impact property values in 2025, but those changes won’t show on tax bills until 2026. Then, other alterations will take effect in the 2026 tax year, yet due to a year-long lag in property tax payments, homeowners will only see those changes in 2027 or even later.

This article breaks down how these changes will transpire, what they mean for tax bills, and when residents can expect results.

Adjustments on the 2026 Tax Bill

Property taxes for schools represent the most significant portion of homeowners’ tax bills. House Bill 186 introduces a new method of calculation.

This reform modifies the existing 20 million floor rule, which is the baseline amount school districts must collect from local residents.

As schools cannot collect below this minimum, the rule that typically reduces tax rates when property values rise won’t apply here. So, for example, if home values increase by 50%, taxes for those schools will also see a 50% rise. However, HB 186 introduces limits on how inflation affects these increases.

While it won’t lower your current tax bill, it does help to prevent future increases. The portion of HB 186 that recalculates taxes in line with the inflation cap is set to provide credits that are estimated at:

• $432 million for tax year 2025
• $608 million for tax year 2026
• $633 million for tax year 2027

These reductions will start next year, but only for districts adhering to the floor rule. Most Ohio school districts qualify, yet many urban and suburban schools do not.

Future Changes Planned for 2027 and Beyond

Another aspect of HB 186 won’t impact tax bills until after 2027.

This section shifts tax credits from homeowners to actual residents of the properties.

Currently, the state covers 10% of all residential property taxes through the Non-Business Tax Credit. Homeowners actually residing in their homes will receive an added 2.5% credit.

HB 186 intends to phase out non-business credits and redirect those funds towards owner credits.

The gradual adjustments will unfold as follows:

• Tax year 2026: Non-business credit drops to 7.5%, owner credit rises to 5.70%
• Tax year 2027: Non-business credit falls to 5%, owner credit increases to 8.92%
• Tax year 2028: Non-business credit reduced to 2.5%, owner credit climbs to 12.15%
• Tax year 2029: Non-business credit hits 0%, owner credit reaches 15.38%

House Bill 335 also takes effect in tax year 2026, so its influence won’t be felt until 2027.

This law caps how much “inside millage” (taxes local governments can raise without voter consent) can increase with property value hikes. It aims to match increases in home values with inflation rates.

It’s worth noting, this doesn’t cut taxes but instead limits future tax increases.

According to estimates, HB 335 could lower real estate taxes by:

• $120 million to $135 million for tax year 2026
• $195 million to $250 million for tax year 2027
• $305 million to $378 million for tax year 2028

House Bill 129 seeks to reform the floor for school districts by broadening what counts toward it. Republican advocates believe that this could prevent significant tax spikes while taking away funds from other tax areas.

HB 129 aims to finalize some existing levies as contributors toward the floor. Analysts project school tax increases will be lessened by:

• $162 million for tax year 2026
• $223 million for tax year 2027
• $224 million for tax year 2028

These projected reductions refer to increases that won’t occur rather than actual cuts to existing bills.

Additional Changes for Potential Savings

House Bill 309 is set to begin in 2026, although it does not guarantee reductions in property taxes.

This bill grants county budget boards the option to lower particular property taxes if they conclude that school districts and local governments are collecting excess funds.

The county budget committee is small, consisting of the county auditor, treasurer, and either county commissioners or the county prosecutor.

These committees assess local tax budgets and approve tax rates annually. Under the new law, the levy can be decreased if deemed unnecessary.

Furthermore, changes in the national budget have made it impossible for school districts and local governments to propose emergency or replacement levies, as they were considered confusing by some lawmakers.

While fixed-rate levies can still happen, they are restricted, applying only to districts that are financially strained or impacted by disasters.

Ongoing Discussions and Possible Changes

Despite this year’s overhaul, the discussion surrounding property taxes in Ohio continues.

Groups working to repeal property taxes are actively gathering signatures for a potential constitutional amendment that might go on the ballot in November 2026.

Additionally, ongoing legislative efforts include a set of proposals from Rep. Gary Click focused on freeing taxpayers from permanent property taxes, enabling voters to decrease local taxes, and altering thresholds for new tax proposals.

Sen. Andrew Brenner is also suggesting replacing all local school property taxes with a $20 million property tax and a 1.75% increase in sales tax statewide.

U.S. Rep. Dave Thomas, instrumental in the property tax reforms, believes there’s still work ahead. He has co-sponsored several bills on the issue, pushing for comprehensive changes.

Thomas’s next initiative would mandate that all counties provide a property tax payment plan and allow at least 30 days between tax bill mailing and due dates.