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Understanding changes to the Ohio Homestead Exemption

August 20, 2013

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The Homestead Exemption, which began in 2007, provides a savings on real property tax to qualified homeowners. 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.

Who qualifies for the Homestead Exemption?

All Ohio homeowners must meet the following criteria:

•    Own and occupy a home in Ohio as your principal place of residence on January 1, 2013 and
•    Are 65 years of age by December 31, 2013, or
•    Are certified totally and permanently disabled as of January 1, 2013, or
•    The surviving spouse of a qualified homeowner who was at least 59 years old at the date of the spouse’s death.

Beginning with tax year 2014, new participants in the Homestead Exemption program will be subject to a means test.

Currently, if you meet the above qualifications, you can apply and there is no income limitation.  Beginning in 2014, however, there will be an income limitation. If your income exceeds $30,000, then you will not qualify for the Homestead Exemption. The income test will be determined by Ohio adjusted gross income, as defined on the Ohio income tax return. Note that this amount does not include taxable social security benefits from the federal return.

Also important to note is that homeowners who received a homestead exemption credit for tax year 2013 and earlier will never be subject to the income requirement.  In other words, existing homestead recipients will continue to receive the credit without being subject to the income test and do not have to resubmit an application.

For past years, the deadline to apply was June 3. With the new law, however, homeowners who are or will turn 65 years of age by December 31 of the current calendar year qualify for the tax relief and have until December 31st to complete an application.  The deadline was extended to the end of the year to give more time to residents who wouldn’t qualify under the $30,000 maximum-income requirement that takes effect next year or 2014.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

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