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There is a flurry of concern arising from the notices hitting mailboxes in Hamilton County from County Auditor Dusty Rhodes telling property owners of their new valuations for the 2021 tax bills. The notice shows the prior 2019 value (2020 tax bill) of your home or business property and your new 2020 valuation (2021 tax bill).

The valuation increases average 15%, but some property owners we are hearing from are seeking hikes more than 25% on specific properties.

Naturally, taxpayers are assuming that means their tax bill will in fact go up that same percentage. But that actually is not so, not at all. Let us explain:

• The simplistic formula for determining your tax bill is: Property tax = property valuation * tax rate for more than 15 tax levies. Then take the sum of each of those individual calculations. The sum of these individual levy calculations plus a “kicker” for something called “inside millage” for the City, Village or Township and the School District — less a host of credits and adjustments — equal your tax bill. (The inside millage is about 10% of your total tax rate.)
• Other than the inside millage, most (not all) of the levies generate a fixed, flat amount of income each year for the tax entity (for example, $10 million per year for a school operating levy or $15 million per year for a mental health levy). Saying it another way, total levy revenue for most levies does not rise or fall based on fluctuations in total valuations — it by law stays constant year after year.
  • On the other hand, that very small part of your tax bill that is inside millage does rise proportionately with your valuation.
• That annual fixed revenue amount from most levies is generated from the total of the valuations in that taxing jurisdiction, i.e., the sum of valuation of all properties (let’s call this the tax base) in the political and taxing jurisdiction in question (say, a school district).
• Thus, the rate for each individual levy is — in a simplified sense — the fixed annual sum generated from the tax divided by the tax base that changes from year to year, usually upward, but occasionally downward.
• What this means is that as the value of all properties in a taxing jurisdiction rise, the rate drops by the same ratio (except the inside millage and a few other exceptions).
• Therefore, if the average valuation increase in Hamilton County is 15%, then the tax rate on average should be dropping about 10-12%. Thus, the real increase in your actual taxes paid should only be around 3-5%.
• Now, two more cautions:
  • If your tax valuation went up more than the average for the political and taxing jurisdiction in question, your tax hike will be more than that 3-5%. So, if you were unfortunate enough to get one of those 25% hikes, your taxes will indeed go up another 10% or more.
  • The other factor that impacts the taxes that you pay is the tax rate, so if your school district or City had a property tax hike (because of COVID, there were a remarkably low number of levies on the ballot this fall), your taxes may rise as a result of the as well.
• As you can see from this blog entry, the calculation of your tax bill involves dozens if not hundreds of individual calculations. The bills are tremendously complicated. But these overarching principles do apply, and therefore most taxpayers will not see tax increases anywhere near the whopping valuation hikes they are seeing on these recent Auditor notices.

We hope that gives property owners some comfort that these preliminary notices do not reflect the actual hike in your taxes coming in January.

David Winter of Local 12 yesterday did a great piece on the recent spike in property values in Hamilton County and how to fight the increase in your property. Watch it and read it here.

County Auditors in Ohio are required by law to re-value every parcel of real estate in their County every three years. The cycles differ by county, but for Hamilton, Butler, Montgomery and Clermont Counties, the next revaluation comes out on the January 2021 tax bills.  This means that for those  counties (and certain others in Ohio), the value stated on every tax bill in the January 2021 tax bills should be new for almost every property owner. Dusty Rhodes, the Hamilton County Auditor has sent new valuation notices to each property owner, and those have been arriving this week. As a result, our phones are really starting to ring.

The Enquirer today reports that Hamilton County property values have spiked 15% from the 2018 values here.

Yesterday, we wrote this blog entry: All the info you need to know on property tax valuation issues in Ohio. Click for more information.

Finally, the Cincinnati Area Board of Realtors is hosting a free seminar featuring Christopher Finney and Hamilton County Auditor Dusty Rhodes on the property tax valuation reduction process. The public is invited to attend.  Click here to register to get a link for that seminar.

Contact Chris Finney (513.943.6655) or Casey Jones (513.943-5673) for more information on reducing your property taxes.