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.

Average Property Taxes in Ohio

In Ohio, property taxes are based on the assessed value and a county-specific tax rate. Average taxes are between $2,000 and $2,500 annually based on an assessed value of $100,000. Lordstown, Beachwood and Mad River have the highest gross tax rates in the state at 6.8 to 6.9%. 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 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.

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 2016, 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 requirement 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 eligible to receive a reduction in property taxes of between $300 and $460 per 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.

Homeowners who live on their own properties 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 1.55%, ranking 12th out of 50 states. Hawaii has the lowest effective property tax rate, ranking 50th at 0.28%. Coming in first with an effective property tax rate of 2.38%, New Jersey has the highest effective property tax rate in the nation.

Property taxes in Ohio's neighboring states vary. West Virginia's effective property tax rate is 0.59%, ranking 45th in the nation. Kentucky's effective property tax rate is 0.85%, ranking 32nd. Indiana's effective property tax rate is 0.86%, ranking 28th. Michigan's effective property tax rate is 1.78%, ranking eighth, and Pennsylvania's effective property tax rate is 1.54%, 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 2013, 87 of the 88 counties in Ohio levied this additional tax, ranging from one to three mills. The lone exception was Ross County. The counties with the highest average conveyance taxes, as measured by average mandatory fee per conveyance, were Delaware at $280.73, Warren at $240.63 and Union at $204.60. All revenue from this tax is deposited in the general fund of the county in which the property was sold. In 2013, conveyance fees made $108.7 million in tax revenues for counties in Ohio.

North Dakota Property Tax Guide

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