Understanding Ohio Homestead Exemption

By
Real Estate Agent with Howard Hanna Gold- Avon Lake, OH 2006004434

Property Tax Relief for Senior Citizens and the Disabled

The State of Ohio has enacted a new and expanded Homestead Exemption, proposed by State Governor early in 2007, that provides additional property tax relief to all senior citizens and qualified disabled Ohioans.

The previous homestead program capped the income eligibility levels and tiered the benefits, which limited those who were eligible. But the new exemption removes the income tests and gives the same benefit to all qualified homeowners: a $25,000 reduction in the market value of their property.

The new Homestead Exemption is available to all homeowners 65 and older and all totally and permanently disabled homeowners, as well as to spouses of previously-qualified homeowners who are now deceased (provided the surviving spouse is at least 59 years old) - regardless of income.

Ohio's New Homestead Exemption: Frequently Asked Questions

1. What is the Homestead Exemption?

The Homestead Exemption allows senior citizens and permanently and totally disabled Ohioans to reduce their property tax burden by shielding some of the market value of their home from taxation.

The exemption, which takes the form of a credit on property tax bills, allows qualifying homeowners to exempt $25,000 of the market value of their home from all local property taxes. For example, through the Homestead Exemption, a home with a market value of $100,000 would be billed as if it is worth $75,000. The exact amount of savings will vary from location to location.

2. How has the Homestead Exemption changed?                                               
Starting July 2, 2007, the Homestead Exemption is now available to all Ohio homeowners, regardless of income, who are either age 65 or older or permanently and totally disabled. These changes are the result of House Bill 119, which was signed into law by our State Governor in June.

3. Who qualifies for the new Homestead Exemption?

Any Ohio resident homeowner who:

  • Is at least 65 years old during the tax year applying;
  • or Is totally and permanently disabled as of January 1, of current year as certified by a licensed physician or psychologist, or a state or federal agency;
  • or Is the surviving spouse of a person who was receiving the previous Homestead Exemption at the time of death and where the surviving spouse was at least 59 years old on the date of death.

To qualify, an Ohio resident also must own and occupy a home as their principal place of residence as of Jan. 1, 2007 for real property or Jan. 1, 2008 for manufactured home property. For individuals who own more than one home, the principal place of residence is the home where the person is registered to vote and the person’s place of residence for income tax purposes.

4. How do I apply for the Homestead Exemption?

To apply, complete the application form (DTE 105A Homestead Exemption Application Form for Senior Citizens, Disabled Persons, and Surviving Spouses ), then file it with your local county auditor.

5. What’s the deadline to apply?

Applications for the new Homestead Exemption must be submitted between the first  Monday in January to the first Monday in June.

6. I already receive the Homestead Exemption.  Do I have to reapply to receive benefits under the new program?

If you received the Homestead Exemption credit on the tax bill you paid last year, you do not need to file a new application. You will automatically receive the new Homestead Exemption for the next tax year if you otherwise qualify.

7. Where do I apply? 

The application must be filed with the county auditor of the county in which the property is located. 

8. May I file electronically? 

Not at this time. A paper copy of the application bearing your original signature must be filed with the county auditor of the county in which your home is located.

9. How will I know if my application has been approved?

If the county auditor approves your application, the county treasurer will notify you by enclosing a notice showing the calculation of your tax reduction with the first tax bill you receive for the new year.

If the county auditor denies your application, you will receive a notice on or before Nov. 1 of the filing year informing you of and explaining the reason for the denial.

If you believe your application was improperly denied, you may appeal the auditor’s decision to the county Board of Revision by filing form DTE 106B, Homestead Exemption and 2.5% Reduction Complaint, on or before the deadline for paying the first-half of taxes. Owners of manufactured or mobile homes may also appeal the denial of a Homestead Exemption application, but their compliant forms must be filed no later than January 31.    

10. How do I show proof of age?

The application form requires individuals to report their age and date of birth, and it is signed under penalty of perjury. Ohio law also provides that anyone who makes a false statement for purposes of obtaining a Homestead Exemption is guilty of a fourth-degree misdemeanor. Individuals convicted of such a misdemeanor are ineligible to receive the Homestead Exemption for the three years following the conviction and must pay any improperly exempted tax, plus interest. Your county auditor may require some evidence of age, such as a driver’s license or birth certificate.

11. What documentation do I need to provide to prove my disability?

If you are claiming a physical disability, you must have the certificate on the back side of the application signed by a physician licensed to practice medicine in Ohio. If you are claiming a mental disability, you must have the certificate signed by a physician or psychologist licensed to practice in Ohio. You may also submit a certificate from any state or federal agency that classifies you as permanently and totally disabled.

 The certificate is part of the application form, DTE 105A, Homestead Exemption Application Form for Senior Citizens, Disabled Persons, and Surviving Spouses .

12. For estate planning purposes, I placed the title to my property in a trust. Can I still receive the Homestead Exemption?

You are eligible for the Homestead Exemption if all of the following are true:

  • You created the trust to be effective during your lifetime (an inter vivos trust).
  • You provided the assets for the trust (you are the settlor).
  • You can terminate the trust at any time (it is a revocable trust).
  • The trust agreement contains a provision that says you have complete possession of the property.  

Most of the other common forms of property ownership (such as survivorship deeds) also qualify for the exemption. If you have questions about what constitutes eligible home ownership for the Homestead Exemption, consult your county auditor.

 13. Will I have to apply every year to receive the Homestead Exemption?

No. However, if your circumstances change and you no longer qualify for the Homestead Exemption, you must notify the county auditor by the first Monday in June.

In January the county auditor will mail you a copy of the continuing application form (DTE 105B, ContinuingHomestead Exemption Application Form for Senior Citizens, Disabled Persons, and Surviving Spouses). Please return this form to the auditor, stating if you no longer own the home, no longer occupy it as your primary place of residence, or if your disability status has changed.

 14. What if I received a larger tax credit under the old version of the Homestead Exemption?  Will I lose out?

Taxpayers will automatically receive whichever credit is larger, and the amount of the credit received in the future cannot be decreased below the amount of savings credited on tax bills paid. 

15. I’ll save quite a bit of money through the Homestead Exemption. Will this hurt my local schools?

The State of Ohio reimburses school districts and local governments for the amount of revenue taxpayers save through the Homestead Exemption. Local governments and schools do not lose out.

 

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