Playground at Bell Creek Intermediate
Tax Credits And Reductions
The bill we keep mentioning that causes outside millage from all reappraisals to be ‘fixed’ is a tax credit. It eliminated the property tax on the increase in property values caused by inflation. Before HB920 went into effect, when a property value increased by 20% the property taxes also increased by 20%. After it, there was a lot more math involved.
So how does HB920 save taxpayers money and lock the school’s income? Let’s see if we can simplify it enough to follow. These numbers are purely hypothetical to explain the math.
We start with the entire tax district. The district’s total assessed value is $30 million. Let’s say this district has 25 mils of outside millage in place. This means that there is $750,000 in tax income being generated for the tax district in voted millage.
After a reassessment, the total assessed value for the tax district jumps up to $35 million. This is a 16.7% increase and is considered the ‘average percent increase’ for the tax district.
This next step is where the tax income ‘lock’ comes into play. The old assessed value is divided by the new one. So, $30 million divided by $35 million. The old value is 85.7% of the new value.
This is how much the outside millage is then reduced by. 25 mils x 85.7% = 21.43 mils. Essentially, HB920 says that even though there are 25 outside mils on the books, the tax district will only get 21.43 mils instead. $35 million x .02143 = $750,000. The tax income generated did not change even though property values went up.
So here’s the credit portion. Take a $100,000 property with a current assessed value of $35,000. Outside millage totals 25 mils. The property owner is paying $875 a year in taxes on those mils.
After a reassessment, the home value goes up to $114,300. This brings the assessed value to $40,000. This is a 14.3% increase in the assessed value, less than the district average of 16.7%.
The same reduction in outside millage is then applied to this property’s new assessed value. $40,000 x .02143 = $857 a year in outside millage.
This property’s outside millage tax burden dropped because the percent increase in their property value was less than the district average. If the opposite is true for a property then the tax burden will increase.
We talk about these details further in the page on ‘How will reassessments affect my property taxes'.
Our apologies if that made your brain hurt. It’s not the simplest thing to explain. However, it is impossible to explain without at least going into the math a little.
Owner Occupancy Credit -
The next credit’s a little easier to explain. There’s an owner occupancy credit for any outside millage that was voted into place prior to Nov. 2013. The state pays 12.5% of those levies. For any levy passed after that the taxpayers foot the whole bill. Just one more way the state is putting the burden of funding public services on our shoulders. It is, however, always a good idea to make sure the owner occupancy credit is being applied to your property if it's your residence. It may not be a huge credit, but saving a little is still better than saving nothing.
Homestead Exemption -
On a more compassionate note, the state recognizes that there are some individuals that will find the local dependency on property taxes an insurmountable burden. They created the Homestead Exemption in 1970 and it’s been effective since, though there have been alterations to the qualifying characteristics over the years. During the informational meeting on Feb 3, 2020 when David Graham spoke, he mentioned that's it's being looked at alteration again in the future. Here is the bill for that legislation. They are hoping to make the Homestead Exemption increase with inflation. If you'd like to see this bill passed contact our new Representative, Brian Lampton, and request he support it.
The current qualifiers are as follows:
Have an Ohio Gross Adjusted Income of $33,600 or less a year. This number adjusted annually.
And have one of these things:
Be 65 or older.
Be certified permanently or totally disabled.
Be a surviving spouse at least 59 years old of a previous participant.
The Exemption effectively reduces a property’s appraised value $25,000. So if an individual that qualifies for the Exemption has a property appraised at $100,000 they are taxed as though it was appraised at $75,000. Veterans who were 100% disabled as a result of their service have their Homestead Exemption reduced by $50,000.
Here’s a quick look at the math. Rather than an assessed value of $35,000, their assessed value is now treated as though it is $26,250. Using the proposed 5.7 mil school levy, here’s what those differences look like. Without the Homestead Exemption the $100,000 property is looking at an increase of $199.50 a year. With the Homestead Exemption the $100,000 property owner would pay $149.63 a year. The state pays the additional $49.87 so the school would still get $199.50. It’s not a perfect system, but it does provide some assistance to those who are struggling the most to keep up with rising property taxes.
We’d heard somewhere that veterans might also receive other assistance for their service that might help them handle the added burden of increased property taxes. So we called the Greene County Veterans’ Services to check into that. We spoke with the director and he told us the only direct property tax related benefit was the one mentioned above. He then further explained that there are benefits available to veterans that might help them with bills but since they have different qualifiers, what kind of assistance a veteran can receive is individual to that person. We asked him if we could include the number for GCVS in this post and he said yes and encouraged any veteran who’d like to know more about what benefits they’re eligible for to call. Their phone number is 937-562-6020.