Ohio Preserves Lower Real Estate Taxes for LIHTC Sites

On Dec. 20, 2012, Ohio Gov. John Kasich signed a bill into law that will keep real estate taxes lower for properties with income restrictions, including low-income housing tax credit properties. The provision was added to H.B. 510 during Ohio’s lame duck congressional session in an effort to make law a practice that had been common in the state before a bill passed earlier in 2012 prohibited it.

                In 2009, the Ohio Supreme Court had ruled that owners of affordable housing sites with income restrictions could appeal the property taxes assessed against their properties if a tax appeals board did not consider how federally imposed restrictions might affect a site’s valuation [Ivy Glen Ltd. Partnership v. Fayette City Board of Revision, February 2009]. Although this decision applied only during the appeals process, it still enabled county auditors to lower the property taxes on income-restricted buildings. However, last year, the Ohio General Assembly passed a budget bill that required county auditors to ignore property restrictions when determining a property’s value.

                The Ohio Housing Council then worked with the Ohio Department of Taxation, the state assembly, and other stakeholders to restore the auditors’ ability to consider income restrictions when assessing income-restricted buildings. As a result, legislators placed an amendment into H.B. 510 that compels auditors to consider a property’s encumbrances when determining its valuation for tax purposes. Since the auditor can now consider a property’s restrictions during the valuation process, site owners in Ohio should end up paying lower taxes for their rent- and income-restricted properties.