Every state has its own method for assessing property taxes. For most states, property taxes are a primary revenue source. Some states assess taxes based on the highest possible value of the property regardless of the current value. Other states, such as Ohio, assess taxes based on a fraction of the current market value.

According to the Tax Foundation, Ohio's state and local tax burden ranks it as the 19th highest in the country. The average effective property tax rate in the state was 1.56%, while the average annual income tax rate was just under 5%.  

Average Property Taxes in Ohio

In Ohio, property taxes are based on the assessed value and a county-specific tax rate. According to SmartAsset, Ohioans paid an average of $3,883 in property taxes annually based on an assessed value of $250,000. Cuyahoga County has the highest gross tax rates in the state at 2.38%. By contrast, the county with the lowest effective tax rate is Lawrence at 0.87%.

To figure out the real estate taxes for a specific county, homeowners multiply the market value of the home by the tax rate that goes along with the taxing district for the property. This formula does not include any special tax breaks due to tax reduction programs.

The assessed value of a property is set at 35% of the appraised value and is the value of the property for which the tax rate is applied. As such, Ohio operates on a fractional market value system. Market value is defined as the price of the property on the market in a fair exchange, where both buyer and seller have full disclosure about the property and its history. It is also a system that employs the use of estimates to determine appraised or assessed value. The estimate is based on the physical characteristics of the property, such as age, condition, size, number of baths and workmanship. Location tends to drive home values more so than physical characteristics. As a solution, the appraiser may base the estimate on recent sales of similar homes in the same area. An auditor in each county is responsible for assessing properties. In Ohio, appraisals are conducted every six years. Home values are updated three years after the appraisal is completed. 

Ohio Tax Reduction Programs

There are several programs that can help subsidize or eliminate the need to pay property taxes in Ohio. Homeowners must apply for these reductions as they are not automatic.

As of 2018, Ohio's Current Agricultural Use Value (CAUV), the agricultural use value, is a tax break for commercial agricultural production. Applicants must have at least 10 acres of land with a minimum income of $2,500 per year.

Another tax reduction opportunity is the Homestead Exemption Program. The permanently disabled and/or those over the age of 65 are able to exempt $25,000 from the market value of their home. Using this exemption, a home valued at $100,000 would only be billed for property taxes at a value of $75,000. According to the Ohio Department of Taxation, the average homeowner who qualified for this exemption saved $495 during the 2015 tax year. 

The Ohio Forest Tax Law is managed at the state level and is available for those with 10 acres or more of woodlands. If it qualifies, the property may receive a 50% reduction in the taxable value of the land. There is a $50 fee in order to apply for this exemption. 

Homeowners who live on their own properties, and keep it as their principal residence, receive 2.5% reductions on their tax bills.

Ohio Property Taxes Compared to Other States and the Nation

Ohio's effective property tax rate for owner-occupied housing is 1.56%, ranking 12th most expensive out of 50 states. According to WalletHub, Hawaii has the lowest effective property tax rate, ranking 50th at 0.28%. New Jersey has the highest effective property tax rate in the nation, coming in first with an effective property tax rate of 2.40%.

Property taxes in Ohio's neighboring states vary. West Virginia's effective property tax rate is 0.59%, ranking 44th in the nation. Kentucky's effective property tax rate is 0.85%, ranking 31st. Indiana's effective property tax rate is 0.87%, ranking 29th. Michigan's effective property tax rate is 1.71%, ranking ninth, and Pennsylvania's effective property tax rate is 1.55%, ranking 13th.

Ohio Real Estate Conveyance Fees

Another component of Ohio's property tax policy is in the form of a fee. Ohio state law places a conveyance fee on the transfer of real estate or manufactured homes. The conveyance fee consists of two parts, and it is paid when the purchase of the property is finalized. The first part is a statewide mandatory tax of one mill. A mill is equal to $1 per $1,000 of the value of the property sold. The second part is voluntary and left up to the county to administer. It gives the county the authority to collect a tax of up to three mills.

As of 2018, 87 of the 88 counties in Ohio levied this additional tax, ranging from one to three mills. The exception was Ross County. The county with the highest average conveyance taxes, as measured by average mandatory fee per conveyance, was Delaware at $313.57, while Clinton County collected the lowest average at $52.55. All revenue from this tax is deposited in the general fund of the county in which the property was sold. According to the most recent available data from the Ohio Department of Taxation, conveyance fees made $132.9 million in tax revenues for counties in Ohio in 2016.

The Bottom Line

On average, Ohio is one of the highest taxed states when it comes to property taxes — the 12th highest in the country. If you're paying property taxes in Ohio, you may be able to file for an exemption to reduce your property tax bill. But in order to qualify, you'll need to apply, as the exemptions are not automatic.

North Dakota Property Tax Guide

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