Ohio Homeowners to See Reduced Property Taxes

In Columbus, Ohio, homeowners are set to benefit from new changes to property tax laws that will soon be presented to the governor.

Recently added to House Bill 186, the amendment aims to extend the owner-occupancy tax credit over the next four years. This is expected to provide about $400 million in annual savings for individuals living in their homes.

The bill, which received bipartisan support on Wednesday, is now awaiting approval from Gov. Mike DeWine. Along with three other property tax reform measures that were also passed, these initiatives could help save homeowners in Ohio more than $2 billion over the coming years.

The Owner Occupancy Credit currently offers a 2.5% discount on eligible property taxes. The new proposal would add another 2.25 percentage points each year, eventually bringing the discount rate up to 15.3%.

To support this change, the amendment will gradually eliminate the 10% non-business tax credit for most properties.

This credit is currently available to homeowners as well as companies that own multiple rental properties. By discontinuing this credit for corporate owners, the funds will instead be directed to benefit individual homeowners.

Only agricultural land will still enjoy the 10% credit moving forward.

Estimating Savings

Homeowners can estimate their savings by checking two figures on their county auditor’s website.

• Non-Business Credit (NBC)
• Owner Occupancy Credit (OCC)

These figures will indicate how much homeowners are currently saving under the existing structure. It’s common for these to appear on semi-annual tax bills, so doubling the total will provide the annual amount.

For instance, if a semi-annual tax bill shows a non-business credit of $300 and an owner credit of $100, then the total savings is $400 every six months—amounting to $800 a year.

Right now, that $800 reflects a 12.5% discount that Ohio offers to most homeowners: 10% from the non-business credit and 2.5% from the owner-occupant credit.

However, with the recent changes to HB 186, the non-business credit will be eliminated for everyone except agricultural land.

Corporate owners of rental houses will fully lose their credits, meaning that around $400 million per year will be redirected to owner-occupied credits.

This shift is why the homeowner discount is expected to rise from 12.5% to 15.38% in four years.

But what does that actually mean for someone who currently saves $800 annually?

Once the credit is fully implemented, the discount will increase by 23%, translating to an additional $184 in annual savings.

Scott Ellsworth, president of the Ohio Real Estate Investors Association, noted that while homeowners might see only “marginal” savings, renters would likely feel a more significant impact.

“They have shifted all the burden onto the leaseholders,” Ellsworth pointed out in an email. “Their rent will go up.”

He also mentioned that around 3% of single-family rental properties are owned by national investors, indicating that the bulk of rental housing is held by ordinary individuals rather than large companies.

Additional Property Tax Changes

The House and Senate have also approved three other property tax bills. Together with HB 186, these are projected to save Ohio homeowners over $2 billion in the near future.

House Bill 129 focuses on changing how the state calculates the $20 million floor for school taxes, potentially delaying automatic increases for certain school districts.

This measure passed the Senate with a vote of 23-10, with Hamilton County Republican Sen. Bill Blessing being the only member from his party to abstain.

House Bill 309 would allow county budget boards to lower levy rates if local officials receive excess funds than necessary.

This bill also passed the Senate 23-10 despite Democratic opposition, which argued that it could undermine voter power.

“This is a direct insult to voters,” commented Sen. Kent Smith, a Democratic representative.

Meanwhile, House Bill 335 aims to cap the amount of domestic millage increases each year to limit tax increases without voter input.

As property values rise, this portion of taxes can increase automatically, even without an approved tax increase.

This bill also passed with a 23-10 vote.

All four measures may reach Gov. Mike DeWine’s office by Thanksgiving.