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Property Tax Appeal - Why are My Taxes So High?
- 1. Reducing your property tax bill Presenter: Paul T. Saba, Esq. sspfirm.com 1
- 2. Full Service Law Firm ◦ Wills, Trusts, Estate Planning & Administration ◦ Real Estate ◦ Corporate ◦ General Litigation Business Disputes Personal Injury And Medical Malpractice Labor And Employment Law ◦ Real Estate Tax Valuation Appeals 2
- 3. This presentation is offered for informational use only. Nothing in this presentation constitutes legal advice, and an attorney-client relationship with either the presenter or Stagnaro, Saba & Patterson, Co. L.P.A. is not created with any member of the audience based solely upon this presentation. 3
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- 6. Your Lender Your Appraiser 6
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- 8. Assessed value ◦ Auditor’s valuation of property ◦ Listed on tax bill Fair market value ◦ Selling price on open market If assessed value = fair market value STOP - DO NOT APPEAL 8
- 9. 9 0 20 40 60 80 100 Year 1985 1990 1995 2000 2005 2010 2015 Historical Effective Rate (Residential/Agricultural)
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- 13. Components of a Hamilton County Tax Bill 13
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- 19. 19 65.06%13.81% School District Township City/Village Joint Vocational School County General Fund Public Library Family Service/Treatment HLTH/Hospital Care-Indigent Mental Health Levy Developmental Disabilities Park District Crime Information Center Children Services Senior Services Zoological Park
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- 21. 1,300 different appraisal districts 350,000 separate parcels 117 tax districts 21
- 22. Reduction results in proportionate tax reduction ◦ $10,000 reduction ≈ $200 in ANNUAL tax savings Savings last AT LEAST through end of triennial ◦ Hamilton, Clermont and Butler Counties 2017 is first year of the triennial 2016 savings will last 1 year ◦ Warren County 2015 was the first year of triennial 2016 savings will last at least 2 years 22
- 24. Tax lien date: 1/1/2016 ◦ Effective date of valuation challenged in 2017 ◦ Evidence MUST prove value AS OF THAT DATE Not when tax bill received Not on date of hearing ◦ Many cases dismissed because this issue is missed Filing deadline: 3/31/2017 24
- 25. The 35% Issue 25
- 26. What your property is worth ◦ “True value” ◦ “Full value” ◦ “Market value” ◦ “Fair market Value” 35% of fair market value ◦ “Assessed value” ◦ “Taxable value” Note Again 1/1/2016 Tax Lien Date 26
- 27. Review of Complaint Form 27
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- 32. Only issue: property value as of tax lien date ◦ January 1, 2016 Auditor required to determine “true value” of parcel ◦ ORC § 5713.03 ◦ If tract is subject of recent arm’s length sale, auditor may accept this as “true value” Unless loss due to casualty; or Unless improvement added 32
- 33. Auditor’s value presumed accurate ◦ Property owner must establish right to reduction ◦ Auditor & school board have no duty to introduce evidence Have duty to respond if property owner has met burden of proof ◦ Board does not have to accept property owner’s evidence ORC § 5715.19(G) ◦ A complainant who fails to provide such information or evidence is precluded from introducing it on appeal to the board of tax appeals or the court of common pleas, except that the board of tax appeals or court may admit and consider the evidence if the complainant shows good cause for the complainant's failure to provide the information or evidence to the board of revision. 33
- 34. “My property value did not increase 25% in 1 year” Listings are of little value Auditor’s valuations of other properties of NO use Actual sales or construction data of subject property Comparable sales are the best evidence 34
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- 36. "Real property," "realty," and "land" include land itself, whether laid out in town lots or otherwise, all growing crops, including deciduous and evergreen trees, plants, and shrubs, with all things contained therein, and, unless otherwise specified in this section or section 5701.03 of the Revised Code, all buildings, structures, improvements, and fixtures of whatever kind on the land, and all rights and privileges belonging or appertaining thereto. "Real property" does not include a manufactured home as defined in division (C)(4) of section 3781.06 of the Revised Code or a mobile home, travel trailer, or park trailer, each as defined in section 4501.01 of the Revised Code, that is not a manufactured or mobile home building as defined in division (B)(2) of this section. 36
- 37. "Business fixture" means an item of tangible personal property that has become permanently attached or affixed to the land or to a building, structure, or improvement, and that primarily benefits the business conducted by the occupant on the premises and not the realty. "Business fixture" includes, but is not limited to, machinery, equipment, signs, storage bins and tanks, whether above or below ground, and broadcasting, transportation, transmission, and distribution systems, whether above or below ground. "Business fixture" also means those portions of buildings, structures, and improvements that are specially designed, constructed, and used for the business conducted in the building, structure, or improvement, including, but not limited to, foundations and supports for machinery and equipment. "Business fixture" does not include fixtures that are common to buildings, including, but not limited to, heating, ventilation, and air conditioning systems primarily used to control the environment for people or animals, tanks, towers, and lines for potable water or water for fire control, electrical and communication lines, and other fixtures that primarily benefit the realty and not the business conducted by the occupant on the premises. 37
- 38. Expert may present valuation issues ◦ Realtor ◦ Appraiser ◦ Environmental Specialist Owner always qualified to render opinion 38
- 39. Three valuation techniques ◦ Comparable sales approach ◦ Replacement value approach ◦ Income approach 39
- 40. Comparable Sales (not listings) ◦ Best comps are within 6 months of tax lien date ◦ Close: same or surrounding neighborhood ◦ Size: similar house and lot size ◦ Age: similar age of construction ◦ Bedrooms & Bathrooms ◦ Total square footage ◦ Number of garages ◦ Interior finish and recent renovation ◦ Amenities (finished basement, pool, etc.) 40
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- 42. Auditor can go back to correct errors ◦ 5 years or until conveyance (whichever is shorter) ◦ Omitted tax ◦ ORC § 5713.20 Board of Revision can increase valuation ◦ Note frequent school board counter-complaints ◦ Expect same on commercial properties 42
- 44. Representatives of Auditor, Commissioners and Treasurer ◦ Note conflict: Auditor as original assessor, “prosecutor,” and judge In outlying counties, these elected officials frequently serve in person 44
- 45. Only complaints regarding valuation within jurisdiction Auditor values set in September ◦ After tax levies from that year are certified Deadline March 31 for preceding tax year Only one complaint per triennial 45
- 46. Property sold in arm’s length transaction ◦ ORC § 5715.19(A)(2) Material change in property ◦ ORC § 5715.19(A)(2) ◦ Casualty, Improvement, Loss of major tenant Unauthorized practice of law ◦ ORC § 5715.19(A)(3) Prior complaint withdrawn before hearing ◦ ORC § 5715.19(A)(4) 46
- 47. Accelerates filing to before tax due date If prevail, no penalties If lose, interest applies ◦ If bill increases, penalty will also apply Danger of tender pay on multiple parcels ◦ Win can still result in penalties and interest 47
- 49. Forum ◦ Common Pleas Court (where property located); or ◦ Board of Tax Appeals Deadline ◦ 30 days after mailing of BOR decisions File with BOR and appellate jurisdiction Further appeal to Ohio Supreme Court 49
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- 51. Current Agricultural Use Valuation (CAUV) ◦ ORC § 5713.31 ◦ Note: partial recoupment on sale Forestry ◦ ORC § 5713.23 ◦ Application with Ohio Dept of Natural Resources ◦ Physical inspection by ODNR ◦ If devoted exclusively to forestry or timber, tax rate is ½ of typical rate 51
- 52. Benefit ◦ $25,000 of home’s market value exempt from taxation ◦ Approximately $500 per year in tax reduction Eligibility (for new applicants starting in 2015) ◦ 65 or older OR totally and permanently disabled ◦ Own and occupy home (up to 1 acre) as of January 1, 2015 ◦ Total adjusted gross income of household ≤ $31,800 for 2017 Property held in trust is an issue 52
- 53. Other programs available ◦ Usually require construction/improvement Residential tax abatement Commercial tax abatement 53
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