Tuesday, June 01, 1999
Homeowners, get ready for reappraisals
Most tax bills in Hamilton Co. likely to go up
BY DAN KLEPAL
The Cincinnati Enquirer
It took a lot of work to turn Michele Burns' dream home into a dream.
New windows were installed so she wouldn't need plastic to keep the wind out during winter. A new bathroom and kitchen on the inside and siding on the outside gave a once run-down home new gleam.
The work was completed in 1998. Starting in 2000, Ms. Burns probably will pay for the comfort she feels in her remodeled Kennedy Heights home with higher taxes.
Exactly how much higher is about to be determined.
Hamilton County this year will adjust property values for all of its 340,000 homes, businesses and farms.
The amount a property has appreciated since the last reappraisal in 1993 will determine how much that property's owner will pay in taxes.
Although most will pay higher taxes, it is possible for property value to go up while the tax bill goes down, if the property appreciated less than other properties in the area.
New tax bills will be sent in January.
It's a complicated and confusing process with only one clear consequence: It will touch everyone's wallet, one way or another.
The process is a $5.9 million endeavor mandated by state law. The system has been in place since 1850 and is meant to ensure that all property owners have a fair valuation so they pay their fair share of tax.
Counties have different reappraisal periods. Hamilton County's reappraisal is this year. The process is slated for 2000 in Warren County and 2002 in Butler County.
Ms. Burns, who qualified for a low-interest government loan to pay for the refurbishing, said she hopes her higher taxes don't put too much of a strain on her budget.
“I feel a whole lot better about my home now,” said Ms. Burns, 44, who moved into her house on Hedge Avenue eight years ago.
“But I did think about my taxes. It won't be too bad if they only go up a few dollars. But it all adds up. If I have to cut back on something else, that's what I'll do.”
Said Ron Hohman, an administrator with the state's Division of Tax Equalization: “Properties don't change in value the same way. Different areas may go up more than other areas. So we go through this process to make sure there is equity in the tax people pay.”
Mass reappraisals happen every six years. A smaller reappraisal based mainly on a review of home sales is done every third year.
The taxes generated from the reappraisals are used to fund schools, local governments, police and fire departments, along with programs for such groups as seniors, children and the mentally disabled.
Hamilton County Auditor Dusty Rhodes will begin sending out tentative values for the properties this week.
Everyone in the county should be notified by the end of August, he said.
And now is the time to get involved if you don't like the value attached to your home.
Starting June 14 and through August, a series of public meetings will be held. They are designed to be an informal way for people to point out errors early in the process.
After the final values are set in December, contesting reappraisal means appearing before a formal Board of Revision.
“If we can catch the little errors first, then everyone is better off,” Mr. Rhodes said in explaining the idea behind the neighborhood meetings. “It used to be that people would have no idea what they're reappraised value was until they got their tax bill. And worse yet, anyone with an escrow account wouldn't know until the bank called.”
Ed Rothenberg is a Hyde Park Realtor who acts as a consultant for people who think their property has been overvalued in the six-year reappraisals.
Mr. Rothenberg said the neighborhood meetings are a useful tool because proving to the Board of Revision property is overvalued can be difficult.
“It's a lot of trouble for an unsophisticated person to know where to start,” Mr. Rothenberg said. “Generally, a person who has done a major rehab on a home will get hit pretty good.”
But higher property values mean different things to different people.
Some are happy because it could translate into a higher sale price.
Others not interested in putting their home on the market are more concerned about higher taxes.
The appraisal process begins with a physical inspection of the property — everything from counting bedrooms to calculating square footage.
Inspectors do not enter into a person's home unless invited. If a homeowner thinks the property has been overvalued, they can request that an inspector come inside.
Besides improvements to the home, the neighborhood is taken into consideration in determining the reappraised value.
“The marketplace speaks volumes about what people prize,” said Hamilton County Chief Deputy Auditor Roger Silbersack. “If every home in a community has gone up by 40 percent, the odds are that the land prices in that community will go up.”
With fair market established, property taxes are cal culated at 35 percent of that value. In other words, for the owner a $100,000 home, property taxes are based on a $35,000 assessed value.
It is against this assessed value that taxing entities — city and village councils, boards of education, county commissioners — propose levies. They determine the type and size of the levy, which is expressed in something called “mills.”
Simply, a mill equals $1 for each $1,000 in assessed value. So one mill for the owner of a $100,000 home with an assessed value of $35,000 equals $35, right?
Not so fast.
The state tax law also allows for a couple of reductions — 10 percent for all real estate owners and an additional 7 percent for owner-occupied residential property (2.5 percent plus an additional 4.5 percent for the stadium tax credit).
After all the dust clears, one mill for the owner of a $100,000 home equals $29.05.
Hamilton County residents pay an average of 553/4 mills in taxes. According to records at the Ohio Tax Commissioner's Office, that is a bit higher than the state average of 50.2 mills.
The owner of that $100,000 home in Hamilton County will pay about $1,619 in property tax.
But an important fact to remember is that the county auditor does not set the millage rate. You do.
The auditor simply is responsible for making sure that fair values are placed on property. Voters either accept or reject tax levies — except for a standard 10 mills that is unvoted upon — during elections.
And Mr. Rhodes stresses that a 13 percent increase in property value does not necessarily mean a 13 percent increase in taxes.
“We deal with fair market value,” Mr. Rhodes said. “If people think they're being taxed too much, they need to look in the mirror. They're the ones that voted for the levies.”
Another important fact is that most voted tax levies don't grow larger with increased property values.
After a reappraisal, Ohio law calls for “reduction factors,” which act as credits to property owners so a levy doesn't raise more than voters approved.
With the complicated nature of the reappraisal, people like Greg Rhoads are thankful for the public meetings.
Mr. Rhoads, who owns a 4-acre lot in Anderson Township, said he appreciates the auditor's effort in opening up the process with public meetings.
“It seems that Dusty (Rhodes) is doing what is reasonably prudent to allow citizens to become involved in the process,” Mr. Rhoads said. “You can't have it both ways — people can't complain about government if they're not willing to provide input.”
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