Some questions about property values and property taxes (Cincinnati, Dayton: condominiums, credit)

[kjbrill]

Originally Posted by cheese9988

So the $1600 tax credit, is that for being a homeowner, or do you get that automatically?

The $1,600 is not a tax credit but a personal income exemption deduction similar to your personal deduction on federal income tax. You are allowed the $1,600 for yourself, your spouse if filing jointly, and for each dependent. You also get an tax credit equal to $20 times the number of personal and dependent exemptions off the tax itself.

[kjbrill]

Warning, property taxes in Ohio can be very confusing. If you look up the tax records on a given piece of property a number of what is this items appear.

For example the current so called true value appraisal of my home is $148,760, making the tax assessed value = 35% or $52,070. By the way that is a drop in true value of $20,290 from 2009 or an estimate 12% drop in property values in my area.

The Gross Property Tax is $5,285.10, which would equal a mileage rate of $10.15/1000. But then there is something called the Reduction which drops the tax $2,065.44 down to $3,219.66 Net Gross. What is this Reduction? In Ohio, by state law, whenever a tax levy is voted in the total value of the levy is computed as voted mileage times the current assessed tax base. This total value is all which can be collected for that levy, except for added tax base value from new construction. So if property values go up due to inflation, etc. the amount collected for the levy must stay the same. This the Reduction, which was voted in back in the 70s when people were seeing their property taxes double and triple due to just inflated increases in home values.

Next comes something called the 10% Rollback. This is a 10% reduction on the Net Gross Tax due to a statewide rollback of property taxes voted by the legislature some years ago. In my case this is $321.96. Then comes the 2.5% Rollback. This is a 2.5% reduction on the Net Gross applicable to owner occcupied homes. In my case this is $80.50. Then comes the Homestead Reduction. This is a reduction granted to people with certain disabilities or to senior citizens. As I am a senior citizen this is $473.42. After the rollbacks are applied, my total net tax is $2,343.78 or less than half the original Gross Tax. So my effective mileage would be $2,343.78/$52,070 or $4.50/1000, quite a difference.

The Reduction in particular is very significant and will vary between taxing jurisdictions. It is an accumulation of all of the various voted taxes, the total value at the time they were individually voted, and the change in property evaluation since that time.

[kjbrill]

The only differences I see Sarah is that 11 years ago real estate prices were pretty stable, and typically creeping upward. If the jurisdictions just automatically devalued to actual sale prices today they stand to lose a lot of tax revenue. I expect them to be more resistent to that, especially since voters are becoming more reluctant to any kind of tax increase.

[Sarah Perry]

Originally Posted by kjbrill

The only differences I see Sarah is that 11 years ago real estate prices were pretty stable, and typically creeping upward. If the jurisdictions just automatically devalued to actual sale prices today they stand to lose a lot of tax revenue. I expect them to be more resistent to that, especially since voters are becoming more reluctant to any kind of tax increase.

Well, I can't speak for anything except Hamilton County, for starters. And I can say that with every re-appraisal my home value is lowered. So they're losing tax revenue anyway.

I see your point, but I believe the legal principle is that nothing establishes the value of a given piece of property so definitively as the price in an arm's length sale. In other words, if the auditor doesn't use that, they're using something less objective and I would assume less legally defensible.

But as I said, I don't know if the same principle applies to "distress sales."

[censusdata]

On every City Data profile page for each town/ city there is property tax info given in the median amount paid / percent of median home value layout. It is generally below the "For Population above 25" section on most pages.

In Ohio you are generally looking at property tax rates btw 1.5% and 2.5% per year. Obviously the value of your home determines the amount you pay. In Kentucky the property tax rates are almost always around 1%, Ford Thomas is around 2% to pay for their own school system. Boone County rates are 0.8%

Here are some real numbers from city data:
Greenhills OH $2,482 (1.8%)
Sharonville OH $1,605 (1.1%)
Cincinnati $1,957 (1.4%)
Fairfield OH $1,872 (1.2%)

[kjbrill]

Originally Posted by censusdata

On every City Data profile page for each town/ city there is property tax info given in the median amount paid / percent of median home value layout. It is generally below the "For Population above 25" section on most pages.

In Ohio you are generally looking at property tax rates btw 1.5% and 2.5% per year. Obviously the value of your home determines the amount you pay. In Kentucky the property tax rates are almost always around 1%, Ford Thomas is around 2% to pay for their own school system. Boone County rates are 0.8%

Here are some real numbers from city data:
Greenhills OH $2,482 (1.8%)
Sharonville OH $1,605 (1.1%)
Cincinnati $1,957 (1.4%)
Fairfield OH $1,872 (1.2%)

Just a couple of points, median relates to the middle in terms of numbers, half of the total above and half below the median value. Also the C-D tax values are quoted based on the market value of the home, not the tax assessed value. So when I look at them they appear low. It has been a lot of years since I paid anywhere close to 2% on the tax assessed value of the home. I would rather see them use an average home value, as this more adequately expresses the spread between high and low value homes.

[censusdata]

City Data community profile lists each place's property tax by

1. The total amount paid per year

2. The average percent of the home's value paid per year

I've looked over tons of places for p.t. info, in general most towns in Ohio will have annual percent paid in the range of 1.6% to 2%. The lowest I've seen is Fairfield (1.2%) and Lebanon (1%).

I believe the main reason for Northern Kentucky's rapid population and job growth is that the property taxes there are lower by a huge margin. Florence KY is 0.9% and has an annual total amount that is the same as a low income Ohio town like Elmwood Place! NKY's most tax communities (Fort Thomas and Park Hills) are still only in the 1.3% range.

This is why I plan on renting in Ohio but then probably returning to KY in a few years when I buy a house. The money saved in taxes more than pays for the extra gas money

[kjbrill]

Again, what I find faulty in C-D's presentation is their total yearly taxes for a median home. And then they do not give what the median home value is. You could take the tax percentage and calculate the median home value, but why can't they just state it.

I have always had a problem with median values. Median literally means half of the total below and half above. If there is a large concentration of property near the median value, you could say the expectation is close to the median. But if there is a vary wide range of property values, median means little, and average is not much better.

Actual property tax in Ohio is assessed as millage against the assessed evaluation. By state law, assessed tax evaluation is 35% of fair market value. Millage is also quite straight forward, simply dollars per mill ($1000) of evaluation. So 4.5 mills is $4.5 per $1000 of assessed value.

So all you really need is the effective millage for any given jurisdiction. Take that times 35% of the sale value and you should be close. The problem is finding the effective millage value. For some reason it seems to be disguised.

[kjbrill]

Another look at Ohio property taxes. As stated before, back in 1976 the Ohio Legislature passed HB 720. At that time, property taxes were rising dramatically just due to inflation driven property values. HB 920 basically put an end to that, by stating that any voted property tax levy had to be equated to a dollar value at the time of voting, and that was the limit which could be collected. If property values went up due to inflation, an effective millage for the levy had to be computed so the total dollars were the same. In ohio tax parlance this is called the reduction.

There was an exemption, tax base increase due to new construction could increase the total collected from the levy, as it was an increase in base value not due to inflation. The one thing which was never clear to me, is new construction taxed at the original millage rate of the levy or the effective milleage rate at the time of the construction?

Another thing I don't understand. Even if property values have dropped in our area of Ohio, and therefore tax assessed values also, why does not HB 720 work in reverse? If property values drop, why is the effective millage not computed in proportion making it go up and keeping the tax revenue the same? Seems like the same forces which worked for the public during inflation should work in reverse during deflation. What am I missing here?

[censusdata]

City Data list property values and taxes paid per year. I don't want to post specif links since it list the property owners name, but you can google (street name) Cincinnati city data and find property value and taxes paid records.

I did that for Hadley Road in Greenhills and found a home that was worth $136,000 and paid $2,683 in taxes in 2009. That's a rate of 1.9% annually

My gf's parent's house in Valleydale is worth $73,460 and paid $1,663 in taxes in 2009. A rate of 2.2%

I found a house on Audubon Road in Park Hills KY (near Devou Park) that was worth $210,000 and only paid $2,098 in taxes in 2011. A rate of 0.9%

Ultimately this is why the Ohio side of Daytonati has a stagnant population while Northern KY is growing at a rate of 1.5% per year. Until Ohio stops putting the squeeze on Middle Class Families there will continue to be a flood of Ohioans moving to Kentucky.