Article

Maximizing reassessment value reductions for commercial real estate in Ohio

Jan. 5, 2023

In Ohio, under state law and Department of Taxation rules, commercial real estate in all counties is reappraised every six years and property values are updated in the third year following each sexennial reappraisal. 2023 marks the beginning of a reassessment year statewide.

Ohio commercial real estate owners and investors will be receiving their newly reassessed notices of value in the mail in the coming days. The initial mailings were sent out as of Jan. 1, but updated notices of value are currently available online for all properties. The time to file an appeal in Ohio is between Jan. 1, 2023, and March 31, 2023.

Appeals are recommended if your property value is overstated by the county, or a recent purchase or sale of the property is significantly lower than the counties listed market value. To initiate an appeal, form DTE 1 must be filed to document your complaint. 

Documentation is necessary to support this claim for a reduction in value. Full copies of a purchase and sale agreement, deed, addendums, documents to support sale price, or an appraisal are examples of evidence that may reduce the valuation. Due to projected immense increases in commercial real estate property values this reassessment cycle, Baker Tilly recommends partnering with a local, experienced property tax consulting firm to structure your appeals in a way that provides optimal value reductions for all Ohio properties in your portfolio.

If you disagree with the value and taxes applied to your property, it is our recommendation to pay the taxes upfront to avoid interest and penalties. The taxes will be refunded if we are successful in obtaining a reduction in value.

New Ohio Law – Sub. H.B. 126

This new Ohio property tax law will dramatically limit the ability of legislative authorities, such as the Board of Education, and other third parties from filing complaints against the valuation of property they do not own or lease unless:

• The party was sold in an arms-length transaction before and not after the tax lien date for the year for which the complaint is being filed, and
• The sales price exceeds the auditor’s true value of the property by both: 10% and a threshold of $500,000, which is subject to an annual adjustment based on inflation

Important notes in navigating the Ohio reassessment

As a commercial real estate owner or investor, there are several important things to note as you navigate this reassessment and receive your newly assessed value online or in the mail in the coming weeks:

• In Ohio, commercial real estate property taxes are assessed at 35% of market value. This is in effect for 2023 reassessment values.
• We recommend filing an appeal on all newly assessed properties, as this is the time with the highest likelihood that the Department of Taxation will provide significant value reductions, and as a result, property tax reductions. Working with Baker Tilly’s Ohio-based property tax specialists will ensure all appeals are filed by the March 31 deadline and are structured in such a way that maximizes value and property tax savings.
• The lien date is Jan. 1, 2022.
• Though property owners may not have received their assessments in the mail, newly assessed values are available for all properties online as of Jan 1, 2023.

Because Ohio operates on a six-year cycle, commercial real estate owners are going to be receiving notices of value from an economy that is recovering from a pandemic and is several cycles behind other states in the region. This, among other factors, are likely contributors to the large value increases commercial properties are seeing this reassessment. Because of this, we strongly recommend partnering with our experienced Ohio team to navigate the appeal cycle, maximize value reductions, and save property tax dollars as a result.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.