Ohio REALTORS voice support for measure to stem rapid property valuation increases
By Andrew Huffman, Ohio REALTORS Director of Government Affairs
Rachel Lewitt, chair of Ohio REALTORS Legislative Steering Committee, testified in support of Ohio House Bill 187, the Homeowners Relief Act, before the House of Representatives Ways and Means Committee yesterday to stem the issues arising due to rapidly rising property values in many areas of Ohio.
Under HB 187, the Ohio Department of Taxation would be required to consider all sales from the three prior years, rather than a sampling of valuations versus sale prices. Many markets could have property valuation increases of 30% to 40%, which could result in double-digit increases in property taxes. A similar provision was added to the state operating budget (House Bill 33), which Ohio REALTORS also supported.
Lewitt told lawmakers that HB 187 would provide much-needed protections to both taxing authorities and property owners, as it would stabilize the cyclical ebbs and flows that occur in the real estate marketplace. The following is a portion of her testimony:
As you are all aware, there has been an outcry from citizens in counties that are undergoing property value reassessments. In certain counties, there are reports of property values increasing by 30% or even above 40%! My home county, Butler County, is expecting property values to increase 42%. Since property taxes are tied to property values, this significant increase could substantially raise the costs of owning or buying a home, or renting an apartment.
There is no doubt that property taxes are critical to the functions of local governments. This revenue stream finances our schools, police and fire departments, as well as parks and other services. However, with this historic rise in property values, we run the risk of unfortunately taxing Ohioans out of homeownership, through no fault of their own. These expected property value increases, coupled with low housing inventory, will only add further strain to Ohio’s housing market. It threatens to displace long-term homeowners and will increase the financial barriers for first-time homebuyers. Higher property taxes not only increase the costs of homeownership but will also impact the rental market as housing providers will have to adjust to a potential double-digit increase in property taxes.
HB 187 helps address this situation by requiring the tax commissioner to work with local elected officials and weigh the past three years of sales data equally to determine a property’s value as opposed to the most recent year’s data. This proposal will help shield homeowners from potential large tax increases as a result of the property valuation adjustments. The measure also provides protections to both taxing authorities and property owners, as it stabilizes the cyclical ebbs and flows that occur in the real estate marketplace. While this will lessen the tax burden in the short-term, we would encourage the Legislature to further examine Ohio’s property tax policies and work with stakeholders to ensure local services are adequately funded, without imposing unsustainable costs on Ohio’s current and future homeowners.
As many of you are aware, owning a home is one of the most secure ways to build generational wealth that can be leveraged later in life or passed onto family members. Homeownership also leads to economic benefits to the state, as each home sale in Ohio contributes an average of over $72,000 back into the economy through retail and appliance purchases as well as construction and renovation costs. Unfortunately, the potential of significant increases in property taxes threatens the dream of homeownership for countless Ohioans.
Formed in 1910, Ohio REALTORS is the state’s largest professional trade organization with nearly 37,000 members representing both residential and commercial practitioners as well as homeowners and homebuyers.
