By: Jodi Littman Tomaszewski, Partner and Dworken & Bernstein Co., LPA
If you live in Northeast Ohio you may have recently received an unwelcomed notice in the mail informing you that your real estate taxes will be increasing. You may be asking yourself how this is possible, especially if you haven’t made any significant improvements to your property lately.
Ad Valorem Taxes
Real property taxes in Ohio are ad valorem taxes, which means that the amount of tax you pay is based upon the value of your property.
Ohio law requires each county to determine the value of all property within its jurisdiction, and this value becomes the basis of your tax assessment.
The county completes this endeavor through a “sexennial reappraisal,” which occurs once every six years, and a “triennial update,” which occurs every third year between sexennial reappraisals.
2018 was a Sexennial Reappraisal Year
2018 was a sexennial reappraisal year for most of the counties in Northeast Ohio. As a result, many property owners will see an increase in their property tax bill for the tax year 2018, which is payable in 2019.
For example, residential property values in Cuyahoga County will be increasing, on average, 10.8% over the prior value, and commercial properties will see an average increase of 8.7%. The increase varies from municipality to municipality so you may fall above or below that average.
Verify Your New Value is Accurate
These increases can be attributed to the robust real estate market that we have experienced in Northeastern Ohio over this last several years.
However, as a property owner, you should verify that the new value set by the county accurately reflects the market value of your property.
For tax purposes, “market value” is defined as price your property would likely sell on the open market between a willing buyer and a willing seller, with neither party being under any compulsion to buy or to sell and with both parties being aware of all the relevant facts.
Several Ways to Establish Market Value
There are several ways a property owner can go about establishing the market value of his/her property.
Recent Purchase Price
Did you recently purchase your property in an arms-length transaction? If so, then the purchase price that you paid to the seller is, in most cases, the best indicator of the market value of your property. If the new value set by the county is materially higher than the price you paid for the property in your recent sale, then you have a very compelling argument that the county should be using your sale price as the market value for tax purposes thereby lowering your tax bill.
What if you are a long time property owner with no recent sale to establish market value? In that case, you may want to retain a certified property appraiser to determine the market value of your property.
If your appraiser concludes that the market value of your property is materially less than the new value set by the county, then you have a good argument that the county should change its tax records to reflect the lower market value determined by your appraiser, which in turn will result in a lower tax bill.
Take Action to Lower Your Real Estate Taxes
If you fall within either category discussed above, or if you have any other evidence to establish that the true market value of your property is materially lower than the new value set by the county, then you should consider taking action.
Most counties offer an informal complaint process, either in person or online, which allows you to object to the county’s new value and to explain why you feel it is inaccurate.
File a Complaint With the Board of Revision
If you are not satisfied with the result of this informal complaint process, then you may want to consider filing a complaint with the Board of Revision.
This complaint is a formal request to the county to decrease the value of your property for tax purposes.
In order to challenge the new values that have just been set for 2018, you are required to file your complaint with the Board of Revision between January 1st and March 31st of 2019.
Once the complaint is filed, you will get a hearing before the Board of Revision. There you can present witnesses and other evidence to establish that the true market value of your property is less than what is reflected in the tax records.
Seek Expert Legal Counsel
Real estate tax valuation is a very complicated area of the law and each situation is unique.
If you are considering challenging your tax valuation, I would highly recommend that you seek legal counsel to assist you with the process.
Dworken & Bernstein Co., LPA has several attorneys who practice in this area and have experience presenting cases to the Board of Revision.
We can analyze your situation and may be able to assist you in getting your real estate taxes lowered.
Give us a call at 440.352.3391 to learn more.