On July 9, 2024, the Cuyahoga County Fiscal Officer (the County) released the newly appraised values for properties within their jurisdiction. As required by state law, every county in Ohio is required to update property values every three years and conduct a reappraisal every six years. The average value increase across the County was 32.22% for residential property, 8.45% for commercial property, and 8.49% for industrial property. However, it is important to keep in mind that tax rates do not increase or decrease proportionally to the change in property value due to House Bill 920 (HB 920). In other words, if your property tax value increases by 50%, your tax bill will also not increase by 50%. In some cases, it is possible that your tax bill may go down even if your property tax value increases.
Reappraisal Process
The County Auditor conducts the appraisals acting as an agent of the State of Ohio Department of Taxation. The Department of Taxation issues an order to initiate reappraisals along with a deadline for completion to which the Auditor must submit to the State a detailed plan for approval. Once the plan is approved, the County commences the State-mandated Sexennial Reappraisal.
The last property valuation change was in 2021, when the County released its Triennial update. The Triennial appraisal is less intensive and the new property values are based on an analysis of sales that have occurred over the previous three years. The Sexennial appraisal, performed this year, is much greater in scope as every parcel in Cuyahoga County must be physically viewed by a State licensed appraiser before the property can be valued. In addition to viewing the property, appraisers are provided with information such as three approaches to value (cost, market estimate, and multiple regression analysis), neighborhood-specific reports (recent sales, Board of Revision decisions, and new construction), and proposed values per square foot. As required by law, the County has been sending notices to all property owners informing them of any changes in property value.
Tax Collection
It is important to note that property tax values and property taxes do not increase at the same rate in Ohio due to tax reduction factors. In Ohio, every year the Ohio Department of Taxation calculates effective tax rates based on tax reduction factors that eliminate the effect of a change in the valuation of existing real property on certain voted taxes pursuant to R.C. 319.301, which was enacted by HB 920 in 1976.
Property taxes are computed in mills (or levies), with one mill costing a property owner $1.00 for every $1,000 of assessed valuation (35% of appraisal value) each year. The final amount owed is the assessed value multiplied by the effective tax rate of voted levies.
Inside Millage
There are two types of millages under Ohio’s property tax system known as “inside” millage or “outside” millage. Inside millage is provided for in the Ohio Constitution and grants the taxing district the authority to establish a rate of up to 10 mills (1% of property value) of property taxes. Inside millage is applied proportionately property value.
Outside Millage
Outside millage is composed of fixed-sum levies and fixed-rate levies. A fixed-sum levy is approved by voters and intended to generate a specific amount of revenue. Given a district’s tax base of $100,000,000, a 50 mill levy would generate $5,000,000. The intent of a fixed-sum levy is to keep revenue generated constant and as a result, property value increases will yield a tax rate decrease while property value decreases will result in a tax rate increase. Similarly, a fixed-rate levy is a voter approved rate, adjusted for reappraisal changes, that is intended to keep revenue constant. However, as values increase due to new construction, taxes will increase.
Use of Tax Revenue
Property taxes are an essential government funding source and used to finance school districts, infrastructure, libraries, parks, public safety, and other public benefits County residents receive.
Common Exemptions
Homestead Exemption
Individuals meeting the following requirements may qualify for lower taxes on their home:
- Are at least 65 years old OR
- Are determined to be permanently and totally disabled; OR
- Are a Veteran who has been determined to have a total service-related disability of 100%; OR
- Are a Surviving Spouse of a Homestead Exemption recipient; OR
- Are a Surviving Spouse of a Public Service Officer killed in the line of duty.
- Own and occupy the home as a primary residence as of January 1 of the year in which the exemption is being sought.
- Have income falling within the state guidelines below:
- $38,600 for income tax year 2023 if applying for real property tax year 2024 as Current Filer
- $36,100 for income tax year 2022 if applying for real property tax year 2023 as Late Filer
Owner-Occupancy Credit
The Owner-Occupancy Credit is a 2.5% reduction in taxes charged by qualified taxes. To receive the credit, an individual must own and occupy their principal place of residence as of January 1 of the year they file for the reduction. For purposes of the credit, principal place of residence is determined by where the individual is registered to vote and where they declare residency for income tax purposes.
Reviewing Your Valuation and Valuation Complaints
Cuyahoga County has been mailing value notices in July. If a property owner is not satisfied with their valuation, they can choose to file an Informal Review Complaint with the County Appraisal Department by August 30, 2024, via the online portal, U.S. Mail, or in person at the Fiscal Office. When filing, the owner should provide supporting documentation including, but not limited to, a complete appraisal report from within the last 36 months, photographs of existing structural damage and/or deferred maintenance, certified estimates for repairs, purchase agreement with closing statement, and sales comparisons. Property owners should avoid comparing their property’s assessment to that of other properties. The County will conduct a review and notify individuals of any adjustment in November. If no adjustment is made, an individual may file a formal Complaint Against the Valuation of Real Property with the Board of Revision between January 1, 2025, and March 31, 2025. Formal complaints may be filed via the online portal, U.S. Mail, or in person to the Board of Revision.
For something as seemingly basic as the value of your property, the process of contesting the reappraised value can be more complicated than it seems. Also, sexennial reappraisals and triennial updates can heavily factor into the benefits of property tax incentives.
KJK’s Economic Development or Real Estate Practice Groups can assist you in understanding and navigating the challenges or opportunities presented by increasing values. Contact Rich A. Morehouse at RAM@kjk.com, Charlie Bolton at CHB@kjk.com or Collin Harrington at Charrington@kjk.com to learn more.