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Property taxes are one of the greatest expenses associated with property ownership, and they are ever increasing. Many owners are unaware that in each state and county, there is a legal right to challenge one’s property valuation and that process can result in a reduction of your taxes and in some cases, a refund of taxes already paid.
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Property Tax Valuation Appeals in Ohio
Sponsored by the law firm of Finney, Stagnaro, Saba and Patterson Co., L.P.A.
Reducing Your Property Tax Bill
Reducing Your Property Tax Bill
Presenters:
• Real Estate • Corporate • General Litigation
• Business disputes• Personal injury and medical malpractice• Constitutional law• Labor and employment law
• Wills, trusts, estate planning and estate administration• Real estate tax valuation appeals
Finney, Stagnaro, Saba & Patterson
Reducing Your Property Tax Bill
http://www.fssp-law.com
What The Packet Contains
Reducing Your Property Tax Bill
Right Pocket:•Finney, Stagnaro, Saba & Patterson Co., L.P.A. Brochure•Course Outline•Real Estate Tax Analysts FlyerRight Pocket:•Tax Graphs•Homestead exemption application•Tax chart by jurisdiction •Blank and completed Board of Revision Complaint forms•Comparable Sales Presentation
1. Benefit: First $25,000 of home’s value is exempt from taxation (worth about $500 per year in tax reduction)
2. Who is eligible:
a) Single family residence/Owner occupied
b) Any one owner who is either over 65 years old or permanently disabled
c) Property held in trust is an issue
3. When is application due? June 1, 2011
Quick Diversion on Homestead Exemption
Reducing Your Property Tax Bill
…and, what can I do about it?
Why are my property taxes so high…
Reducing Your Property Tax Bill
Year
Residential Effective Rate
Mills
A. Property Tax History in Hamilton County
Reducing Your Property Tax Bill
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B. History & Projection of taxes (City of Cincinnati, Cincinnati Public Schools)
Reducing Your Property Tax Bill
C. Comparison to Surrounding Counties
Reducing Your Property Tax Bill
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D. Major Ohio Counties
Reducing Your Property Tax Bill
II. COMPONENTS OF HAMILTON COUNTY PROPERTY TAX BILL
How are my taxes calculated?
Reducing Your Property Tax Bill
A. Broad calculation of tax bill
Reducing Your Property Tax Bill
VALUATION x RATE
– ROLLBACKS=
TAX
Valuation isthe one variable
you can influence
B. The Valuation Component
Reducing Your Property Tax Bill
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C. What valuation reduction means
1.Valuation reduction results in proportionate reduction in taxes
2.A reduction of $10,000 in value will result in $200 of ANNUAL tax savings
Reducing Your Property Tax Bill
What valuation reduction means (cont.)
3. Savings last AT LEAST through the end of the triennial
a. Hamilton, Clermont and Butler Counties this is the last year in the triennial
b. Warren County—2011 is second year of new triennial so savings in 2011 will last for at least two years
Reducing Your Property Tax Bill
The Assessment Challenge
Hamilton County has 1,300 different appraisal districts
Hamilton County has 350,000 separate Auditor parcels to be assessed
D. Rate Consists of Various Components
Reducing Your Property Tax Bill
1. Review of prototype Hamilton County tax bill 3630 Zumstein Ave, owned by Mark Miller
2. Overview Chart of tax breakout
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First Half Calculations Tax Distributions 1/5/2010
Half Year Real Taxes + Delq Real Estate (if any)
3630 Zumstein Avenue, Cincinnati, Ohio
Reducing Your Property Tax Bill
Property Value and Rate
Reduction Factor
0.332776
3630 Zumstein Avenue, Cincinnati, Ohio
Reducing Your Property Tax Bill
Calculations for 3630 Zumstein Avenue
Reducing Your Property Tax Bill
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Percent
65%
15%
5%
4%
3%
2%
2%
2%
1%
1%
Tax Distributions for 3630 Zumstein Avenue
Reducing Your Property Tax Bill
Tax Distributions for 3630 Zumstein Avenue
Reducing Your Property Tax Bill
III. Complaint form and filing procedures
A. Critically important datesB. The 35% issue – they do it to confuse youC. Review of Complaint form and its
completionD. Presentation of case at Board of RevisionE. Risks to complainantF. Procedural issuesG. Appeal procedures
Reducing Your Property Tax Bill
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1. Tax lien date: 1/1/2010i. This is the effective date of the valuation challenged in
2011
ii. All of your evidence MUST BE targeted towards proving your property’s value AS OF THAT DATE (not when you get tax bill or have your hearing)
a. Lots of cases this year were dismissed because this key issue was missed
2. Filing deadline: 3/31/2011
A. Critically Important Dates
Reducing Your Property Tax Bill
“True Value” “Full Value” What your house is worth “Market Value” “Fair Market Value”
“Assessed Value” 35% of Fair Market Value “Taxable Value”
Note Again 1/1/2010 Tax Lien Date
B. They Do It To Confuse You
Reducing Your Property Tax Bill
Reducing Your Property Tax Bill
2010
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Reducing Your Property Tax Bill
1/20/2010
Reducing Your Property Tax Bill
Residential
1. Actual sales or construction data of the subject property
2. Comparable sales are the best evidence
3. Listings are of little value
4. Auditor’s valuations of others’ properties of NO use
D. Presentation at the Board of Revision
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5. Comparable sales (this means SALES, not listings)i. 1/1/2010 tax lien dateii. Timing: Best sales are 6 months on either side of that dateiii. Location: Close in location, in the neighborhood or
neighborhoods close byiv. Size of house and lot: Similar house and lot sizev. Age: Similar age of constructionvi. Bedroomsvii. Bathroomsviii. Total square footageix. Number of garagesx. Amenities like finished basement and poolxi. Interior finish and recent renovation
Valuation Information to Present (cont.)
Reducing Your Property Tax Bill
A. “My property did not go up 25% in value in one year”
B. Auditor’s value of neighbors property is irrelevant
C. The only issue is: what the property is worth as of the “tax lien date” (January 1st,
2010)
Evidence Presented at the Hearing
Reducing Your Property Tax Bill
D. Value is defined in ORC §5713.03, which requires County Auditor to determine the “true value of each parcel of real property”
E. If Tract is part of on-going arms length sale, it is required to accept this as the “true value” ORC 5713.03
1. Unless loss due to casualty; or
2. Improvement added
Evidence Presented at the Hearing (cont.)
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F. Three valuation techniques:
1. Comparable Sales Approach
2. Income Approach
3. Replacement Value Approach
Evidence Presented at the Hearing (cont.)
Reducing Your Property Tax Bill
G. Who May Testify:
1. Expert Witness (realtor or appraiser) may present valuation issues
2. Property owner is always qualified to render opinion as to the value of his or her property
3. No one else may present evidence
Evidence Presented at the Hearing (cont.)
Reducing Your Property Tax Bill
H. Property Owner has the burden of proof
1. Neither Auditor nor school board have a duty to introduce any evidence at the hearing, except to rebut what property owner accepts
2. The Board of Revision does not even have the duty to accept evidence
tendered by the property owner
Evidence Presented at the Hearing (cont.)
Reducing Your Property Tax Bill
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A. Auditor can go back five years to make corrections to errors, or until conveyance. (Whichever is shorter)
-Omitted tax-ORC §5713.20
B. Board of Revision can increase valuation in its proceedings
*Note frequent school board countercomplaints.
( Expect same on commercial properties)
E. Risk to Complainant
Reducing Your Property Tax Bill
A. Board of Revision1. Composition
a. Representatives of County Auditor, County Commissioners and County Treasurer
b. Note conflict of Auditor as original assessor, “prosecutor” and judge
c. In the outlying counties, frequently these elected officials will serve in person
d. Some claim that political pressures of school boards or “inertia” of protecting established values
F. Procedural Issues
Reducing Your Property Tax Bill
2. Jurisdiction a. Handling appeals of property valuations within their jurisdiction.
Procedural Issues (cont.)
Reducing Your Property Tax Bill
3. Proceduresa. Values of the Auditor for a tax year are made in December of that tax year, after the tax
levies from that year are certified
b. Filing deadline of March 31 for preceding tax year (December valuation)
c. Only one appeal during a triennial, unless there has been a material change in the property during that time such as improvements, casualty or loss of a major tenant
Procedural Issues (cont.)
Reducing Your Property Tax Bill
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A. Accelerates filing to before tax due date
B.If prevail, no interest and penalties
C.If lose, interest applies and if bill increases from about originally billed, penalty will apply
Note: Danger of tender pay on multiple parcels. A win can still result in penalties and interest
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Tender Pay at Filing
A. Forum: Either to Common Pleas Court where property is located or Board of Tax Appeals
B. Trial de novo at Board of Tax Appeals- new evidence allowed
C. Filed appeal to Board of Revision and appellate jurisdiction, 30 days after mailing of BOR decisions
D. Appeal from either of those to the Ohio Supreme Court
G. Appeal of Board of Revision Decision
Reducing Your Property Tax Bill
A. CAUV. “Current Agricultural Use Valuation” ORC §5713.31Note: Partial recoupment on sale
B. Forestry. ORC §5713.231. By completing an application
with Ohio Department of Natural Resources
2. If devoted exclusively to forestry or timber owner, tax rate
is ½ of typical rate
3. Is accompanied by physical inspection by ODNR
IV. Other Statutory Savings
Reducing Your Property Tax Bill
C. Homestead Exemption1. Reduction for senior (65 or older) or disabled citizen, regardless of income, on dwelling that is individual’s principal place of residence and up to 1 acre
2. Exemption is equal to the amount of tax that would be charged
on up to $25,000.00 of market value
3. Must own and have occupied home on Jan. 1 of the year in
which you file.
D. Tax Abatement Programs
Other Statutory Savings (cont.)
Reducing Your Property Tax Bill
V. Conclusion
Reducing Your Property Tax Bill
A. Thank you for comingB. Go save some moneyC. Let us know if you want us to assist you in your filing
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