New Ohio bills vow property tax relief for seniors, veterans

Yahoo

20-02-2025

[In the player above, watch previous FOX 8 News coverage on property values in Northeast Ohio.]
COLUMBUS, Ohio (WJW) — A new Senate bill from a Northeast Ohio lawmaker proposes freezing property tax increases indefinitely on homes that are seniors' primary residences.
Another would exempt disabled veterans from property taxes entirely, while extending that exemption to their surviving spouses.
Elsewhere in the Statehouse, a newly introduced House bill would 'fundamentally' change longstanding state property tax credits, intending to offer more tax relief to Ohioans who need it most.
It's the first of more than a dozen House bills on property tax reform expected in this General Assembly, said its sponsor, a local state representative.
Frustration mounts as Ohio statehouse tackles property tax relief
Under Senate Bill 81, introduced by state Sen. Tom Patton of Strongsville, R-24th, eligible seniors' property taxes would be locked in once they qualify. For example, if a homeowner first qualifies for the freeze in tax year 2025, their taxes would be frozen at their tax year 2024 levels, according to a Legislative Service Commission analysis.
The freeze functions as a tax reduction, where the reduction is however much their taxes increased from the year before they qualified.
'It's not rocket science,' Patton told FOX 8 News.
Seniors who have lived in their homes for decades paid much less for them than what they're worth today — especially in high-value neighborhoods like Tremont and Ohio City, Patton said.
'When these last property valuations came out so markedly high, it troubled the hell out of a lot of people, but especially my retirees,' he said. 'I've had people tell me they end up cutting their pills in half. I've had clerks at the Giant Eagle tell me when it's a day or two before their Social Security checks arrive, they're asking if there's two-day-old bread.'
If a homeowner is also eligible for Ohio's homestead tax exemption, it would take effect first, reducing the amount of taxes they owe before they're frozen at that level.
These reductions would not be reimbursed by the state. The leftover tax burden would be shifted to eligible seniors' neighbors, Patton said.
'But I'd be the first to say if [my property tax] goes up $20 a year to take care of the retiree next to me, I'm OK with that,' he said.
To qualify, homeowners would have to be at least 65 years old and have a total annual adjusted gross income less than $70,000, according to a news release from Patton's office.
They would be able to apply for the freeze through their county auditor's office and would need documentation to prove they're eligible, according to the commission.
The bill has been referred to the Senate's Ways and Means Committee and had its first hearing on Tuesday, Feb. 18.
Patton's Senate Bill 92, also introduced this month, would make totally disabled veterans' homes entirely exempt from property taxes.
Ohio's homestead exemption is for homeowners who live in their home and are 65 and older, permanently and totally disabled, or spouses of a first responder who was killed in the line of duty. It essentially knocks $28,000 off the taxable value of a home, or $56,000 for disabled veterans and first responders' spouses, according to a Legislative Service Commission analysis.
Patton's bill would replace the enhanced exemption for veterans with a total exemption. They would be able to apply for the exemption through their county auditor, and would have to show that they have a total disability rating and that they were honorably discharged.
'Our disabled veterans have already sacrificed so much for the country, there is no reason why they should feel like their homes are threatened by unaffordable increases in their property taxes,' Patton is quoted in a news release. 'My colleagues and I are working to address property tax affordability, and in the interim we must protect those who protected us on the front lines.'
Currently, Ohio fully reimburses forgone tax revenue from the homestead exemption.
The bill is now before the Senate's Ways and Means Committee and had its first hearing on Tuesday, Feb. 18.
If approved by the Legislature, it would take effect in tax year 2025. Since Ohio property taxes are paid in arrears, that means eligible veterans would stop paying in 2026.
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Homestead exemption values are adjusted for inflation, but rising property values have been outpacing them, said state Rep. David Thomas of Jefferson, R-65th.
House Bill 61, called the Homestead and Owner Occupancy Overhaul Act, replaces each of those forenamed tax benefits with a flat credit capped at $750 — and $1,500 for veterans and spouses — which would increase alongside inflation.
'It's fundamentally changing how the credit is given,' said Thomas.
The exemption currently saves households an average $350 to $500 each tax year, but that can vary greatly depending on the home's value, he said. Overall, homeowners are saving about as much with them as they did in 2007, when the exemptions were expanded. An increase to $750 will be a big bump for most folks, Thomas said.
'This change is vital because currently homestead folks are actually losing credit amount each year as the value taken off the property increases less than the tax rate applied to it decreases,' Thomas is quoted in a news release. 'By having a flat amount that increases with inflation, we will be sure that seniors will not lose savings and will be guaranteed to see that savings increased.'
Since tax exemptions are tied to a property's value, they have more of an impact in areas with higher tax rates. A flat dollar credit would have more of an impact for households with lower income or property values, Thomas said.
Ohio's owner-occupancy tax credit reduces taxes on all other homeowners' primary residences by 2.5%. House Bill 61 replaces that 2.5% rollback with a flat $750 credit, also tied to inflation.
The bill also reinstates 10% property tax rollbacks for non-business properties, which stopped more than a decade ago.
The rollbacks gave owners of one-, two- or three-family dwellings or nontimber agricultural land a 10% reduction on their taxes owed under certain property tax levies approved before November 2013. The bill would allow the rollback to be applied to all voted levies.
'Hit so heavily': Cuyahoga County residents shocked by proposed property reappraisals
Currently, property tax revenue forgone by the homestead and owner-occupancy benefits is entirely reimbursed by the state through sales and income taxes — to the tune of about $1 billion per year. Co-sponsoring state Rep. Jack Daniels of New Franklin, R-32nd, said that's 'not sustainable.'
Under House Bill 61, the state would only reimburse half, leaving local taxing entities to share the rest of the burden, Thomas said. He added the 50-50 split is 'negotiable.'
Thomas acknowledged that local government funding has dwindled over the last several years, but he noted that recent property revaluations — including in Cuyahoga County — have effectively raised property taxes across the state. Thomas' home county of Ashtabula had $13 million in 'unvoted, unbudgeted' tax increases after its most recent property revaluation in 2023, he said.
'Some entities decided not to fully collect that amount or decrease their tax rates. Many entities did not,' Thomas said.
'Did your local governments collect that increase? No one theoretically held a gun to the school board or city council or county commissioners to collect the unvoted tax increase that resulted from the revaluation. Entities could have said no,' he later added. 'The question taxpayers need to ask is, 'What did you do?' and 'How are you spending that increase?''
Since property taxes are paid in arrears in Ohio, some changes to the law would apply to tax years ending after the bill takes effect. Other changes would apply to manufactured homes — which are specially taxed for the current year — as soon as 90 days after the bill becomes a law.
The bill has been referred to the House Ways and Means Committee. Its first hearing was set for Wednesday, Feb. 19.
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