Death and Taxes
Grrr… nothing makes me more disgruntled than the thought of taxes. In the beginning over every year, we turn our attention over to the issue of taxes. Some of us will hire a CPA, others purchase the latest income tax preparation software. In my next installment of my “Tell Me Something I didn’t Know” series, I wanted to discuss another type of tax and an easy way in some circumstances to reduce them .. Property Taxes.
Counties in Ohio assess property tax based on that County Auditor’s value assigned to that particular parcel. Consequently, the higher the Auditor’s value, the higher the property taxes and conversely the lower the Auditor’s value the lower the property taxes. Sometimes the Auditor’s valuation is not representative of the true market value of the property (i.e. it may be too high or too low).
Did you know that a homeowner can file a complaint against the Auditor’s valuation? Yes, they can. If they believe that the Auditor’s valuation is too high, they may ask the County’s Board of Revision to consider a reduction, thereby reducing the property taxes. Keep in mind however that the owner is not the only one who can file a complaint. For example your local school board may believe the Auditor’s valuation is too low and file a complaint asking for the value to be increased, thereby increasing the property taxes.
Here are the details. First a complaint for a current tax year has to be filed by April 1st of the following tax year. So for example, if an owner wants to file a complaint for the 2015 tax year, then the complaint is due by April 1, 2016. If a school board files a complaint, then the owner has an opportunity to file a counter complaint 30 days after they receive notice of the school board’s complaint.
Oftentimes new property owners are not aware of their property’s valuation relation to the property taxes they owe or the option to file a complaint in some circumstances. Time for an example. Let’s say a buyer pays $150,000.00 in an arm-length transaction for a home but the Auditor’s valuation is $200,000.00. The sale price is evidence of market value and the Auditor’s value is $50,000.00 higher than market value. Another way, this buyer is paying taxes on a $200,000.00 instead of $150,000.00. Should the homeowner in this scenario consider filing a complaint? Yes.
Valuation complaints have to be filed with all of the documents that support what the owner believes to be the correct value. Some examples might be a copy of a purchase contract and settlement statement if the property was recently purchased. Another example might be an appraisal from a licensed or certified appraiser. Owners are cautioned to either file a complaint themselves or with the assistance of counsel. Many Boards of Revision in Ohio dismiss those complaints filed by appraisers, accountants, real estate agents or members of an ownership entity.
Although taxes are as certain as death, at least for some there may be an opportunity to reduce the burden. Additional information concerning a property valuation complaint and the County Board of Revision is available on the County Auditor’s website.