Property values and taxes are on the rise this year in Greater Cincinnati, leaving many homeowners puzzled about the reasons behind this increase. In this article, we'll delve into the factors responsible for the surge in property values and property taxes and shed light on various aspects of this phenomenon.
How Much Did Property Values and Taxes Go Up?
Not all properties experienced the same increase in value or taxes. According to the latest data from the Hamilton County auditor, property values in Hamilton County increased by an average of 28%, while taxes rose by approximately 12%. In Butler County, just north of Cincinnati, property values skyrocketed by 37%, resulting in an average tax increase of 13%. Similarly, in Clermont County to the east of Cincinnati, property values rose by 30% with a corresponding average tax increase of 17%. These three counties were up for reappraisal in 2023, while Warren County is set for reappraisal this year.
Disparities Between Neighborhoods
Every neighborhood and town has its uniqueness, with a wide variation in property values and taxes. In many cases, areas with historically lower property values saw the biggest increases, while wealthier neighborhoods experienced less variation. The approved levies in each area also played a role in determining the final tax amount. To check how your neighborhood or municipality fared, you can visit the Hamilton County auditor's site.
The Housing Market Boom and Soaring Property Values
The booming housing market across Ohio has been the main catalyst behind the historic rise in property values. Homeowners in Hamilton, Butler, and Clermont counties were taken aback when they received their new tentative assessments from the county auditors. Compared to the previous reappraisal in 2020, where taxes increased by 6% overall, the recent reappraisal showed a staggering 12% increase in property values.
Understanding Reappraisal
County auditors conduct a full reappraisal of properties every six years for tax purposes and update appraisals every three years based on market data. The 2023 reappraisal in Hamilton County was a full reappraisal, involving the auditor's staff viewing the exteriors of properties and utilizing current market data.
A Non-Partisan Issue
Contrary to politically motivated blame games, property values and taxes surged in both Democrat-controlled and Republican-controlled counties. Hamilton County, controlled by Democrats, and Butler and Clermont counties, controlled by Republicans, all witnessed substantial increases. Thus, the rise in property values and taxes is not a partisan issue.
Where Does the Money Go?
The majority of property tax bills in the region are allocated to school districts, often accounting for over half of the total tax bill. For example, in Clermont County, schools will receive 58% of the property tax revenue this year. Additional portions go to county and local governments, park districts, zoos, libraries, and other services, depending on your location.
The Role of Property Values
While property value increases contribute to the overall tax increase, they do not account for the entire hike. State laws limit property taxes to a predetermined amount. Therefore, if property values decline, tax rates increase to compensate, and if property values rise, tax rates decrease. For instance, the tax levy that supports the Cincinnati Zoo & Botanical Garden remains constant at $7 million annually. Consequently, as property values rise, the tax rate for individual properties decreases.
Impact of 20-Mill School Districts
Some school districts have a minimum tax floor known as a 20-mill floor, which affects properties differently. Inside millage, which represents the first ten mills on a tax bill and is not subject to voter approval, fluctuates with changes in property value. Outside millage, the portion approved through levies, depends on voter decisions. Certain school districts with a 20-mill floor witnessed a greater impact from property valuation increases. In Butler County, the 20-mill floor accounted for 73% of the increased property taxes.
From Voters to Lawmakers: Understanding the Roles
Ultimately, voters decide on tax increases, and various entities, including school districts, counties, municipalities, townships, park districts, libraries, and other special service districts, can propose property tax levies for voter approval. State lawmakers, particularly in the Ohio General Assembly, also play a vital role in determining funding policies for entities such as schools. It is worth noting that the overreliance on property taxes by school districts was deemed unconstitutional by the Ohio Supreme Court in 1997, yet the issue remains unresolved.
Efforts to Ease the Burden
County commissioners have the power to reject tax increase proposals. In 2023, the Hamilton County commissioners voted against a tax increase proposed for the zoo. In addition, the Butler County commissioners reduced their portion of property taxes by $6 million, resulting in a tax break of $15.40 per $100,000 for property owners. Likewise, several municipalities in Butler County, including West Chester, Fairfield, Liberty townships, Middletown, and Seven Mile, offered property tax breaks ranging from $9.63 to $14 per $100,000. However, no similar tax breaks were reported in Hamilton County.
Challenging Property Appraisals
If you disagree with your property's final value, you have the option to file a complaint with the Hamilton County Board of Revision between January 1 and March 31, 2024. The Hamilton County Auditor's Board of Revision site provides information on the process and evidence needed to support your case. Tax bills are due by February 5. To check your property's value and taxes owed, simply enter your address into the property search field on the Hamilton County auditor's website.
Understanding the factors behind the surge in property values and taxes helps homeowners comprehend the impact of their choices, local schools, and market forces. By staying informed and engaging in the assessment process, individuals can participate in shaping their community's property tax landscape.
