Homestead Tax Reduction
- What is the homestead exemption?
The homestead exemption provides a reduction in property taxes to qualified senior or disabled citizens, or a surviving spouse, on the dwelling that is that individual's principal place of residence and up to one acre of land of which an eligible individual is an owner. The reduction is equal to the taxes that would otherwise be charged on up to $25,000 of the market value of an eligible taxpayer's homestead.
House Bill 59, passed June 27, 2013, and effective September 29, 2013, has made significant changes to who will qualify for the Homestead exemption on a going-forward basis. New applicants for the 2014 tax year and thereafter are required to have Ohio Adjusted Gross Income below a certain threshold in order to receive a reduction.
Persons who qualified and received the reduction for tax year 2013 (collected in 2014) have been "grandfathered" and will not be affected by the changes.
In addition, Am Sub House Bill 85, effective September 11, 2014 created an additional classification for recipients who are veterans experiencing service-connected disabilities and their qualifying spouses. The reduction for veterans qualifying for this new classification is equal to the taxes that would otherwise be charged on up to $50,000 of the market value of an eligible taxpayer's homestead.
- How do I apply for the homestead exemption?
You need to file a "Homestead Exemption Application for Senior Citizens, Disabled Persons and Surviving Spouses" (Form DTE 105A (PDF)) or a "Homestead Exemption Application for Disabled Veterans and Surviving Spouses" (Form DTE 105I (PDF)) available from the County Auditor or on the Ohio Department of Taxation's website. For "Disability" applicants only, you also need to file a "Certificate of Disability" (Form DTE 105E (PDF)) available from the County Auditor or on the Ohio Department of Taxation's website.
- When can I file?
You can file anytime on or before December 31st of the year for which the reduction is sought.
- Who is eligible for the homestead exemption?
To receive the homestead exemption as a senior citizen, disabled person or surviving spouse you must:
- Be at least 65 years of age during the year you first file, or be determined to have been permanently and totally disabled (see definition below), or be a surviving spouse (see definitions that follow).
- Own and have occupied your home as your principal place of residence on January 1 of the year for which you file the application.
- Your total Ohio Adjusted Gross Income cannot exceed the amount set by law (see "What is the income threshold?"). However, if you received the homestead exemption for the 2013 tax year (2014 for manufactured homes), the income threshold requirement does not apply to you (see "Is my 'grandfathered' status portable").
Definition of a Surviving Spouse
An eligible surviving spouse:
- Must be the surviving spouse of a person who was receiving the homestead exemption by reason of age or disability for the year in which the death occurred.
- Must have been at least 59 years old on the date of the decedent's death.
Permanent and totally disabled means a person who has, on the first day of January of the year for which the homestead exemption is requested, some impairment of body or mind that makes them unfit to work at any substantially remunerative employment which they are reasonably able to perform and which will, with reasonable probability, continue for an indefinite period of at least 12 months without any present indication of recovery, or who has been certified as totally and permanently disabled by an eligible state or federal agency.
Qualifications for the Homestead Exemption as a Disabled Veteran
To receive the homestead exemption as a disabled veteran you must:
- Have been discharged or released from active duty.
- Be determined to have a total service-related disability or be receiving compensation for a service-related disability at a level of 100% following a determination of individual unemployability by the Department of Veteran's Affairs or its predecessor or successor, or be a surviving spouse (see definition below).
- Have been discharged or released under honorable conditions.
- Own and have occupied your home as your principal place of residence on January 1 of the year in which you file the application.
Definition of Surviving Spouse of a Disabled Veteran
To be eligible as a surviving spouse of a disabled veteran:
- Must be the surviving spouse of a person who was receiving the homestead exemption for the year in which the death occurred.
- Must have occupied the homestead at the time of the veteran's death.
- Must acquire ownership of the homestead or, in the case of a homestead that is a unit in a housing cooperative, continue to occupy the homestead.
The surviving spouse remains eligible for the exemption until the year following the year in which the surviving spouse remarries.
- What is the income threshold?
The statute calls for the maximum Ohio Adjusted Gross Income to be indexed each September.
- The threshold income for tax year 2021 (payable in 2022) will be $34,200
- The threshold income for tax year 2022 (payable in 2023) will be $34,600
- The threshold income for tax year 2023 (payable in 2024) will be $36,100
- What if I am eligible for the 2013 tax year but failed to apply?
If you did not file for the 2013 tax year you will fall under the new provisions of the law and must meet the income threshold in order to receive a reduction. Disabled veterans who meet the disability requirements do not need to meet the income threshold.
- What happens if I own 2 homes?
A person only has 1 principal place of residence: where you are registered to vote and where you declare residency for income tax purposes. Only the principal place of residence qualifies.
- What income is used to determine my eligibility?
"Total income" is defined as the Adjusted Gross Income for Ohio income tax purposes (line 3 of Ohio income tax return) of the owner and the owner's spouse for the year preceding the year for which you are applying.
- What if I do not file an Ohio Income Tax Return?
Adjusted Gross Income includes compensation, rents, interest, fees and most other types of total income. Certain Social Security and disability benefits are not included in Adjusted Gross Income. If you are unsure of what income is included, contact your County Auditor. You may be required to produce evidence of income.
- Will my income be verified by the Auditor's Office?
The new application form shall contain a statement that signing the application constitutes a delegation of authority by the applicant(s) to both the Ohio Tax Commissioner and to the County Auditor and to their designated agents, individually or in consultation with each other, to examine any tax or financial records relating to the income of the applicant as stated on the application for the purpose of determining eligibility for the exemption or a possible violation of the homestead laws.
- If I am currently receiving the homestead reduction, am I required to provide my income?
Only those whose income changes eligibility status from the previous year need provide their income. Any person who received a homestead reduction for the 2013 tax year (for manufactured homes-2014 tax year) is exempt from the income threshold requirement and is not required to report income.
- Is my "grandfathered" status portable?
If a person or person's surviving spouse moves to another residence in Ohio and that person received the homestead reduction for the 2013 tax year (2104 for manufactured homes), that person or the surviving spouse is exempt from the income threshold requirement for the homestead reduction at the new property. Form DTE 105G (PDF) must be filed with the auditor of the new county of residence.
- What is the "great grandfathered" clause and is it portable?
A taxpayer who received a homestead reduction for tax year (TY) 2006 will always receive the greater of the reduction calculated for TY 2006 or the reduction under the current program. For manufactured homes, the reference year is tax year 2007. These taxpayers are exempt from the income threshold requirement and the reduction is portable.
- What types of properties are eligible for the homestead exemption?
Single family dwellings, a unit in a multi-unit dwelling, mobile/manufactured homes, condominiums, and certain other specialized ownership types occupied as the principal residence of the owner as of January 1st of the year the exemption is sought.
- Who is considered a homeowner?
In general, these individuals are considered owners:
- An individual named on the deed
- A purchaser under a land installment contract
- A life tenant under a life estate
- A mortgagor (borrower) for an outstanding mortgage
- A trustee of a trust with the right to live in the property
- A settlor, under a revocable or irrevocable inter vivos trust, holding title to a homestead occupied by the settlor as a right under the trust
- How much will my taxes be reduced by the homestead exemption?
The benefit for eligible applicants is still a tax credit equal to the amount of tax on $25,000 of the "true value" appraisal of the home for Senior Citizens, Disabled Persons and Surviving Spouses. The benefit for eligible applicants that are Disabled Veterans and their Surviving Spouses is a tax credit equal to the amount of tax on $50,000 of the "true value" appraisal of the home.
Depending upon the taxing district in which you reside, that would normally result in a savings of $250 to $400 per year ($125 to $200 per half) in Shelby County for qualified applicants that are Senior Citizens, Disabled Persons and Surviving Spouses. The savings for qualified applicants who are Disabled Veterans and their Surviving Spouses is $500 to $800 per year ($250 to $400 per half).
- Do I need to apply again if I am already receiving the homestead exemption on my tax bill?
No. Taxpayers already on the program do not need to file a new application. Each year, the Auditor's Office will mail you a Continuing Homestead Exemption Application form (Form DTE 105B (PDF)). If no changes have occurred, you do not have to return this form.
- How do I show proof of my age and/or residency?
At the discretion of the County Auditor, you may be asked for appropriate identification information. Providing false information on that application would be considered a perjury and subject to prosecution. Also, you would be barred from the program for 3 years thereafter and subject to repayment of any wrongfully claimed benefits plus interest on the benefits improperly received.
- How will I know if my application has been approved?
For approved applications, the exemption amount and tax reduction will be noted on the tax bill you receive in January of the year following the one in which you make application. If your application is rejected for any reason, you will receive written notification from the County Auditor on or before the first Monday in October. If you wish to appeal the Auditor's denial, you may complete DTE Form 106B (PDF) - Homestead Exemption and Owner-Occupancy Reduction Complaint.