| Here’s a question I get all the time at the | | | | only mandating changes allowed by voters. |
| Association: “If our Columbus investment | | | | Thus, it is this same law that works in reverse |
| property values actually go down, how much of a | | | | when Columbus investment property values go |
| tax break will I see?” The surprising answer | | | | down. Here’s an example, provided by Joe |
| to that question, is NONE! Here’s why. | | | | Testa, county auditor. |
| In Ohio, our tax laws are designed to protect | | | | In the City of Columbus, the average residential |
| schools and other governmental organizations | | | | home value is currently $117,700. If a reappraisal |
| during down markets the same way they are | | | | increased the districts residential value 10%, that |
| designed to “theoretically” protect | | | | homes value would go up to $122,870 and the |
| homeowners during boom markets. This is | | | | tax bill would increase by 1.8% or $31.20 per year. |
| accomplished through House Bill 920 in the state | | | | Likewise, if reappraisal decreased that value 10% |
| of Ohio. | | | | to $100, 530, the tax bill would only be reduced |
| When real property undergoes a reappraisal or | | | | by the same amount, 1.8% or $31.20 per year. |
| triennial reappraisal update, “tax reduction | | | | Using this example, you would have lost $11, 170 |
| factors” are applied to create separate | | | | worth of equity and “saved” only $31.20 |
| effective millage rates for Class 1 (residential) and | | | | per year in reduced tax bill. If nothing had changed |
| Class 2 (non-residential) property in each school | | | | (adjusting the millage rates), it would take you |
| district. | | | | 358 years to recover that loss through slightly |
| These effective millage rates limit school | | | | reduced tax bills. |
| districts’ revenue growth from real property | | | | Therefore, in both boom and bust real estate |
| inflation to receive no more money that what the | | | | markets, tax authorities can adjust the effective |
| voters approved through their levies (note: new | | | | millage rates either up or down, in order to ensure |
| building construction is an exception to this rule | | | | that the schools and social service agencies get |
| and creates new revenues for the districts) | | | | the revenue they need to operate.Dave Zehala is |
| The rationale for this bill was twofold: | | | | the Executive Director of the Columbus Real |
| First, it protects taxpayers from undue increases | | | | Estate Investors Association. Check out tons of |
| in their property taxes as a result of inflationary | | | | free Columbus investment property, property |
| increases in the value of their property. | | | | management, wholesaling, tax foreclosure, |
| It’s also worth noting that this bill was | | | | lease-option, rent to own, HUD homes, real estate |
| enacted at a time 30 years ago when property | | | | investment, landlord, REO, foreclosed home, real |
| values were increasing at a much faster rate than | | | | estate listings, and foreclosure info on his |
| were income levels. | | | | websites. |
| Second, it keeps our local authorities in check by | | | | |