Recent Changes to the Ohio Homestead Exemption

The Bottom Line: The Ohio Homestead Exemption is now available to all qualifying residents regardless of income.

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What is it?

• 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. But overall, across Ohio, qualified homeowners should save an average of about $400 per year.

 

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 Gov. Ted Strickland on June 30, 2007. Previously, eligibility for the Homestead Exemption was restricted through income tests that disqualified most senior citizens. For example, during the 2006 tax year, any senior citizen or disabled Ohioans with household income of more than $26,200 per year could not qualify for the savings. Another important change: All households who qualify for the Homestead Exemption will now receive a flat $25,000 property tax exemption on the market value of their home. Previously, benefits were tiered according to homeowners’ income and usually not as valuable. Because of these changes, the number of households eligible for the Homestead Exemption is expected to grow from 220,000 to an estimated 750,000. The average size of tax relief available to qualifying homeowners is expected to grow by about 25 percent per household.

When does the new Homestead Exemption start? The new Homestead Exemption starts with tax bills payable in 2008. For real property, bills paid in 2008 cover the 2007 tax year. For manufactured or mobile homes, bills paid in 2008 cover the 2008 tax year.

Who qualifies for the new Homestead Exemption? Any Ohio resident homeowner who: Is at least 65 years old during 2007; or Is totally and permanently disabled as of January 1, 2007 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.