As 2025 draws to a close, Ohio real estate practitioners and property owners face a transformed legal landscape. From historic property tax reforms to new licensing requirements and investor regulations, the Ohio General Assembly enacted sweeping changes that will fundamentally alter how properties are bought, sold, taxed, and valued across the state. This article reviews the most significant developments of 2025 and their practical implications for property owners, investors, and real estate professionals as we head into 2026.
Historic Property Tax Reform: Four Bills Reshape Ohio’s Tax Landscape
On December 19, 2025, Ohio Governor Mike DeWine signed a comprehensive property tax reform package into law, marking the most substantial overhaul of Ohio’s property tax system since the 1970s. The package comprises four bills (House Bills 186, 335, 309, and 129) that collectively aim to save Ohio property owners billions of dollars over the next several years while fundamentally changing how local governments raise revenue.
The Core Reforms
House Bill 186 (HB 186) introduces an “Inflation Cap Credit” that prevents increases in school district property tax revenue from exceeding the rate of inflation. For school districts operating at the “20-mill floor” (a baseline tax rate below which effective rates cannot fall), this measure caps annual revenue growth to match the Consumer Price Index. The Legislative Service Commission estimates this provision alone will save Ohio taxpayers approximately $1.7 billion over three years.
HB 186 also restructures tax credits for residential property owners by phasing out the 10% “non-business credit” for all properties except agricultural land while simultaneously increasing the “owner-occupancy credit” from 2.5% to 15.38% over four years. This shift redirects tax relief toward homeowners’ primary residences rather than rental properties or secondary homes.
House Bill 335 (HB 335) addresses “inside millage,” which refers to property taxes that local governments and school districts can levy without voter approval (up to 10 mills). Previously, inside millage could generate unlimited revenue increases as property values rose during reappraisals. HB 335 caps inside millage growth to the rate of inflation during reappraisal and update years, preventing automatic tax spikes when property values surge. The measure is projected to save taxpayers between $620 million and $763 million over three years.
House Bill 309 (HB 309) empowers county budget commissions (usually composed of the county auditor, treasurer, and prosecutor) with greater authority to review and potentially reduce tax levies when revenues exceed operational needs. HB 309 provides a new check on local government spending by allowing county-level officials to identify and eliminate “unnecessary” or “excessive” levies.
These reforms build upon earlier 2025 legislative action. As we discussed in our previous article on property tax changes, the General Assembly successfully overrode Governor DeWine’s veto of provisions in the state budget (House Bill 96) that eliminated replacement levies, emergency levies, and substitute levies effective January 1, 2026. The December package represents a second wave of reforms addressing the structural drivers of property tax growth.
“Flip the Script” on Property Valuations
Within this reform package, House Bill 124 (HB 124) fundamentally alters the property valuation dispute process. Under prior law, the Ohio Department of Taxation (ODT) would analyze housing sales data and order counties to adjust property values accordingly, with county auditors bearing the burden of challenging ODT’s conclusions.
HB 124 reverses this dynamic by placing county auditors in control of determining which sales data to include or exclude when calculating property values. If ODT disagrees with an auditor’s valuation determinations, ODT must now file an appeal to the Board of Tax Appeals and carry the burden of proof to challenge the auditor’s decisions. This shift is designed to prevent inaccurate valuations that could unfairly increase tax bills, particularly during periods of real estate market volatility.
For property owners and tax attorneys, this change means county auditors may have greater flexibility to exclude outlier sales or anomalous transactions that do not reflect typical market conditions. It also accelerates the timeline for Board of Revision filings, moving the abstract submission deadline from June to May.
Criticism of the Reforms
Not all stakeholders view the property tax reforms favorably.
The sweeping changes have met significant resistance from a coalition of local government and education advocacy groups. The Ohio School Boards Association (OSBA), the Buckeye Association of School Administrators (BASA), and the Ohio Association of School Business Officials (OASBO) have collectively warned that the revenue restrictions will force many districts into fiscal distress, particularly those already operating at the 20-mill floor with limited options for additional funding. In joint testimony, these groups argued that the reforms create “phantom revenue,” in which the state funding formula counts districts as having more local capacity than they actually possess because of artificial revenue caps.
Furthermore, OASBO and other legal critics have raised concerns about the package’s constitutionality under Article XII, Section 2 of the Ohio Constitution (the Uniformity Clause). They contend that applying different tax credit factors based on a county’s specific reappraisal cycle creates a non-uniform system in which identical properties are taxed at different effective rates.
Concerns regarding local services have been echoed by the Ohio Mayors Alliance, which warned that the inside millage cap in HB 335 could create a multibillion-dollar budget shortfall. They noted that such restrictions could necessitate draconian service cuts, including the layoff of police, fire, and other first responders in fast-growing municipalities.
Real Estate Licensing Modernization: Lower Barriers to Entry
On April 9, 2025, Ohio enacted significant reforms to real estate licensing requirements through House Bill 238 (HB 238). These changes lower educational barriers and modernize pathways to licensure for both real estate salespersons and brokers.
HR 238 reduces the required pre-licensing education for real estate salespersons from 120 hours to 100 hours. While this may seem modest, the reduction reflects legislative efforts to streamline occupational licensing across multiple professions in Ohio, making it easier for individuals to enter the real estate profession without sacrificing essential knowledge.
The reforms in HB 238 also eliminate the four-year degree requirement for broker applicants. Previously, aspiring brokers needed either a bachelor’s degree or significant equivalent experience. Under the new law, candidates can qualify by completing a specialized certificate program or by demonstrating documented real estate experience, broadening access to broker licensure for experienced practitioners without formal college degrees.
These licensing reforms may lead to an influx of newly licensed agents entering the market in 2026, as well as experienced salespersons transitioning to broker status through alternative pathways.
Wholesaling Regulation: Ohio’s First Comprehensive Framework
In November 2025, Ohio became one of the first states to enact comprehensive regulation of real estate wholesaling through Senate Bill 155 (SB 155). Wholesaling involves a buyer (the “wholesaler”) contracting to purchase property from a seller and then assigning that contract to a third-party end buyer (or conducting a simultaneous “double close”) before taking possession of the property. Critics have long argued that wholesalers sometimes mislead sellers about the nature of the transaction or the wholesaler’s ability to complete the purchase.
Mandatory Written Disclosure Requirements
SB 155 requires wholesalers to provide sellers with a separate written disclosure document before entering into any purchase contract. The disclosure must be printed in boldface type of at least 12-point font, and substantially in the form to be provided in a new Ohio Revised Code section 5301.95. This disclosure must clearly state:
- The wholesaler is purchasing the property with the intent to resell it for profit, not as a primary residence or long-term investment.
- The wholesaler may not have sufficient funds to close the transaction without assigning the contract or securing third-party financing.
- The wholesaler intends to assign the purchase agreement to another buyer.
- The property owner should obtain an independent evaluation or appraisal to determine the property’s fair market value.
- The property owner is advised to seek legal counsel before signing.
Both the wholesaler and the seller must sign and date the disclosure document. Notably, wholesalers cannot modify or waive these disclosure requirements through contractual language.
Enforcement and Penalties
If a wholesaler fails to provide the required disclosure, the property owner may cancel the purchase contract at any time before closing without penalty. Upon cancellation, the wholesaler must return any earnest money or deposits to the seller within 30 days.
Additionally, violations of SB 155 may constitute unfair or deceptive acts or practices under Ohio’s Consumer Sales Practices Act, potentially exposing wholesalers to civil liability, damages, and attorneys’ fees.
Practical Implications
For real estate investors and transactional attorneys, SB 155 requires immediate compliance updates. Wholesalers must revise their standard contracts to incorporate the mandated disclosure as a separate document. Merely including the language within a purchase agreement will not suffice. Real estate attorneys advising wholesale clients should review all transaction documents to ensure compliance and should consider the increased liability exposure when structuring deals.
It is worth noting that the disclosure requirements apply only when the wholesaler acts as the buyer in a transaction with a property owner. They do not apply when the wholesaler is acting as the seller (such as when assigning the contract to an end buyer or conducting the second closing in a double close).
Foreign Land Ownership Restrictions: Legislative Efforts Stalled
Throughout 2025, the Ohio General Assembly actively debated House Bill 1 (HB 1), which would prohibit individuals, businesses, and governments associated with designated “foreign adversary” countries (e.g., China, Cuba, Iran, North Korea, Russia, and Venezuela) from owning property within 10 miles of military installations or critical infrastructure. HB 1 would also have prohibited such entities from acquiring agricultural land anywhere in the state.
As of December 2025, HB 1 remains pending and did not receive a final vote before the legislative recess. The measure faced significant opposition from civil rights organizations, immigrant advocacy groups, and some business interests who argued it would discourage legitimate foreign investment and raise constitutional concerns under equal protection principles.
While HB 1 has not become law, the ongoing debate creates uncertainty for foreign investors and corporations with international ownership structures. For a comprehensive analysis of HB 1’s provisions, the positions of supporters and opponents, and potential constitutional implications, please see our earlier article on Ohio’s proposed foreign land ownership restrictions.
Looking Ahead to 2026
The 2025 legislative session reshaped Ohio’s real estate legal framework in ways that will require ongoing attention and adaptation. Property tax reforms will fundamentally alter how tax bills are calculated, starting with the 2026 tax year, requiring property owners and municipalities to adjust budgeting expectations. Real estate professionals must ensure compliance with new licensing and wholesaling requirements, while foreign investors and their counsel should continue monitoring HB 1’s status as the General Assembly reconvenes.
Real estate transactions, property tax disputes, and compliance with evolving regulatory frameworks demand careful legal navigation. For guidance on how these 2025 reforms affect your real estate holdings, investment strategies, or professional practice, contact KJK’s Real Estate Practice Group.
Contact: James J. Scherer at JJS@kjk.com or Matthew T. Viola at MTV@kjk.com for assistance with real estate transactions, property tax appeals, and regulatory compliance matters.