Tax Data Series

Real Property

Real Estate Taxes: Real Property Tax Relief
10 Percent and 2.5 Percent Rollbacks, and Homestead Exemption, by County, Distributed during Calendar Year 2005 (for Tax Year 2004)

Current state law (Revised Code Section 319.302) requires each county auditor to reduce all real property taxes charged by 10 percent. In addition, Section 323.152(B) requires the county auditor to further reduce the real property tax on owner-occupied property by 2.5 percent. Owner-occupants who are age 65 or older or who are permanently and totally disabled may qualify for an additional reduction in their real property taxes by applying for a homestead exemption under Section 323.152(A). In calendar year 2005 (tax year 2004), a homestead exemption is granted for aged or disabled owner-occupants whose total income does not exceed $25,000.

Effective June 30, 2005 by Section 612.21 and first applied to tax year 2005 (distributions made in calendar year 2006) by Section 557.15, the 10 percent rollback will be applied to all real property that is not intended primarily for use in a business activity. Qualifying property includes property subject to the following uses: farming; leasing property for farming; occupying or holding or leasing property improved with single-family, two-family, or three-family dwellings; or holding vacant land that the county auditor determines will be used for farming or to develop single-family, two-family, or three-family dwellings.

Local governments are fully reimbursed from the state general revenue fund for these tax reductions. The Department of Education reimburses the schools for their share of the tax reductions and the Tax Commissioner reimburses the counties, townships, municipalities, and special taxing districts for their shares of the tax reductions. The county auditor also receives 2 percent of the amount reimbursed under Section 323.152 as payment for administering the homestead exemption and 2.5 percent rollback.

Table PD-1 indicates that during calendar year 2005, the Departments of Taxation and Education together reimbursed local governments a total of $1,354.7 million, including $1,122.7 million for the 10 percent rollback, $71.5 million for the homestead exemption (including $819,870 for late-filers), and $160.7 million for the 2.5 percent rollback (including $114,520 for late-filers). Additionally, $4.6 million was paid by the Departments of Taxation and Education to county auditors for administering the homestead exemption ($1.4 million) and 2.5 percent rollback ($3.3 million). These administration payments are excluded from the table.