What are Real Estate Taxes?
In the State of Ohio, real estate taxes are based upon the appraised value of property. Counties, cities, towns, villages, school districts, and special districts each raise money through real estate taxes. Governments have the ability to levy taxes upon land located within their jurisdiction. The money collected from taxes funds schools, pays for police and fire protection, maintains roads, and supports community services such as libraries and parks.
Under Ohio law, property taxes are calculated annually by the Auditor.
Property taxes are charged as “mills.” One mill is one-thousandth of a dollar – this equates to one-tenth of a cent, or $0.001.
All Ohio residents pay a base tax rate of 10 mills. This base rate comes from the Ohio Constitution, and is meant to provide all governmental units with a base amount of operating revenue. In addition to this base rate, voters can approve additional funds for roads, schools, libraries, and other important governmental services. This additional millage must be voted on and approved before being added to the property tax calculation.
The Auditor is also responsible for determining a property’s fair market value as part of the calculation process. Fair market value is the amount a buyer and seller would be willing to agree to in an arm’s length transaction on the open market. The Auditor uses fair market value to determine a property’s assessed value, which in Ohio amounts to 35% of the fair market value.
To arrive at the amount of property taxes a taxpayer owes, the Auditor multiples the property’s assessed value by the total mill rate, and divides by 1,000. Expressed as an equation, the process looks something like this:
Fair Market Value x 35% = Assessed Value
Example: A home with a fair market value of $100,000 would have an assessed value of $35,000 ($100,000 x 0.35).
(Assessed Value x Mill Rate)/1000 = Base Property Tax
Example: A home with a fair market value of $100,000 and an assessed value of $35,000 is subject to three property tax millages – the base rate of 10 mills, 10 mills of school taxes, and 10 mills of road taxes – for a total mill rate of 30 mills. Using the formula, the taxpayer owes a base property tax of $1,050 ($35,000 x 30)/1000 = $1,050.
Base Property Tax + Special Assessments = Total Property Tax
In addition to the base property tax, taxpayers may also be subject to special assessments. A special assessment is a property tax that can be added for certain special projects, like installing water lines, sewer lines, and storm water runoff systems. The base property tax, and any additional special assessments, form the total property tax:
Total Property Tax - Reduction Credits = Property Tax Owed
The total property tax amount can be reduced by reduction credits, such as the Homestead Exemption program that is administrated by the Auditor’s office.
Property taxes are collected by the Treasurer twice each year, with approximately half due in February and the remaining half due in July. For more information on the property tax rate calculation process, contact the Auditor’s office at 937-225-4326.
To find your current property tax rates, and tax rates for past years, use the links below:
Tax Due Dates
Click here for the list of property tax due dates for the current year.
Guide to Reading Your Tax Bill
Click here for a guide to reading your property tax bill.