In 2013, Governor John Kasich signed into law a revised Homestead Exemption. There have been significant changes to who will qualify for the Homestead exemption on a going-forward basis. Persons currently receiving Homestead will not see their status reviewed, nor will the income thresholds put into place by the new law affect their exemption. However, those who turn 65 in 2014 or who become permanently and totally disabled after January 1, 2013, will be required to have Ohio qualifying income (below $30,500), of the owner and spouse for the year preceding the year in which a homestead application is made, in order to receive a homestead exemption based upon age or disability. Those who sign up for the homestead exemption and turned 65 in 2013 or earlier and those who were totally disabled as of January 1, 2013 will not be affected by the income thresholds put into place by the new law. The $30,500 amount is adjusted for inflation by the Tax Commissioner in September of every year. The threshold can increase, but it can never be less than $30,000. The new exemption offers eligible homeowners the opportunity to shield up to $25,000 of the market value of their homestead (a dwelling and up to one acre of land) from property taxation. For example, if a home is valued at $100,000, the property tax will generally be billed as if the home were valued at $75,000. You must apply with your local county auditor in order to take advantage of the homestead exemption, which saves the typical homeowner about $300 per year. This year, County Auditors will be accepting applications from the first Monday in January through the first Monday in June.
The definition of a “disabled veteran” is a person who is a veteran of the armed forces of the United States (including the reserve components or the National Guard) who has received a permanent total disability rating or a total disability rating for a service-connected disability or combination of service-connected disabilities for which the Code of Federal Regulations identifies as a 100% evaluation.
Disabled veterans must otherwise qualify for the Homestead Exemption. Therefore, the definitions of “homestead” found in R.C. 323.151 (A)(1)and “owner” found in R.C. 323.151 (A)(2) apply. The disabled veteran must be living in the home for which application is made both on January 1 of the year sought as well as the date the application is filed.
If a veteran meets the definition found in R.C. 323.151(F), under R.C. 323.152(A)(2), that person will have the opportunity to shield up to $50,000 of true value of their home and up to one acre of land from property taxation, (as opposed to the current homestead reduction of taxes equal to the taxes on $25,000 of true value). For example, if a home is valued at $100,000, the property tax will generally be billed as if the home were valued at $50,000.
The disabled veteran must provide a letter or other written confirmation by the Federal Department of Veterans Affairs, or any predecessor or successor agency, showing that the veteran qualifies as a disabled veteran as described above.
What is the homestead exemption?
The homestead exemption allows senior citizens and permanently and totally disabled Ohioans, which meet the income requirements, 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’s value is $75,000 (for veterans it would be as if it’s value is $50,000).
The exact amount of savings will vary from location to location. But overall, across Preble County, qualified homeowners should save an average of about $300 per year (for veterans, the average has not yet been determined).
The tax exemption is limited to the homestead, which Ohio law defines as an owner’s dwelling and up to one acre of land. The value of the exemption may not exceed the value of the homestead.
How has the homestead exemption changed?
Starting January 1, 2014, the homestead exemption is available to all Ohio homeowners, who are either age 65 or older or permanently and totally disabled and have an Ohio qualifying income of the owner and spouse, $30,500 or less, for the year proceeding the year in which a homestead application is made. These changes are the result of House Bill 59, which was signed into law by Gov. John Kasich on June 27, 2013.
Starting September 11, 2014, the homestead exemption is available to all Ohio veterans that are 100% disabled (see above). The income requirement does not apply to qualifying disabled veterans.
Previously, eligibility for the homestead exemption was available to all Ohio homeowners, regardless of income, who were either age 65 or older or permanently and totally disabled.
When did the new homestead exemption start?
The new homestead exemption started with tax bills payable in 2015. For real property, bills paid in 2015 cover the 2014 tax year. For manufactured or mobile homes, bills paid in 2015 cover the 2015 tax year.
Who qualifies for the new homestead exemption?
Any Ohio resident homeowner who:
- Turns 65; or is totally and permanently disabled as of Jan. 1 of the year they apply, 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. Also, disabled veterans with 100% service-connected disability qualify. Surviving spouse of the disabled veteran must be living in the home receiving a homestead reduction at the time of the disabled veteran’s death, and must be an owner or acquire ownership of the property in order to receive surviving spouse benefits. There is no age requirement for a veteran’s spouse.
To qualify, an Ohio resident also must own and occupy a home as their principal place of residence as of Jan. 1 of the year they apply, for either real property or 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.
I'm 65 but my spouse is younger than I am. Are we eligible for the homestead exemption?
If one of the principal owners of the property is 65 (or disabled) and the home is that person’s principal place of residence, the property is eligible for the Homestead Exemption. Ohio law anticipates many applicants may be in this situation, which is why an eligible owner’s surviving spouse may continue to receive the Homestead Exemption if the eligible spouse dies and the spouse is at least 59 on the date of death. Disabled veterans with 100% service-connected disability are eligible with no age restriction.
How do I apply for the homestead exemption?
To apply, complete the application form (DTE 105A, Rev. 11/13; Homestead Exemption Application Form for Senior Citizens, Disabled Persons, and Surviving Spouses) or (DTE 105I, Homestead Exemption Application for Disabled Veterans and Surviving Spouses) then file it with your local county auditor. The form is available from county auditors, and also on this Web site.
What is the Addendum to the Homestead Exemption Application for Senior Citizens, Disabled Persons and Surviving Spouses?
For applicants who have previously received the homestead exemption under R.C. 323.152(A)(2)(b).
Individuals who received the homestead exemption for tax year 2013 (2014 for manufactured and mobile homes) on any residence may continue to receive the homestead exemption on another residence within the state without meeting the income test currently required for the exemption, if a different residence otherwise meets the qualification of a homestead. The form (DTE 105G Rev. 11/13) is available from county auditors, and also on this Web site here.
In order to assure that an applicant has previously received the homestead exemption for the aged or disabled, certain information must be made available to the county auditor.
What’s the deadline to apply?
The applications window opens after the first Monday in January and closes on or before the first Monday in June.
I already receive the homestead exemption. Do I have to reapply to receive benefits under the new program?
If you already received the homestead exemption credit on the tax bill you paid, you do not need to file a new application. You will automatically receive the new homestead exemption for the next tax year if you otherwise qualify.
If your spouse met the age or disability criteria, you do not need to file a new application for the exemption. If you were 59 at the time of your spouse’s death you will continue to qualify.
Where do I apply?
The Homestead Exemption application can be filled out at the county auditor’s office in which the property is located. The application is also on this Web site here. The application must be filed with the county auditor of the county in which the property is located.
May I file electronically?
Not at this time. A paper copy of the application bearing your original signature must be filed with the county auditor of the county in which your home is located.
How will I know if my application has been approved?
If the county auditor denied your application, you were required to receive a notice on or before Nov. 1, informing you of and explaining the reason for the denial.
If you believe your application was improperly denied, you may appeal the auditor’s decision to the county Board of Revision by filing form DTE 106B, Homestead Exemption and 2.5% Reduction Complaint, on or before the deadline for paying the first-half taxes (in most counties, the due date is in January or February). Owners of manufactured or mobile homes may also appeal the denial of a Homestead Exemption application, but their complaint forms must be filed no later than January 31.
The complaint form is available from county auditors, and also on this Web site here.
How do I show proof of age?
Your county auditor may require (those 65 or older) some evidence of age, such as a driver’s license or birth certificate.
The application form requires individuals to report their age and date of birth, and it is signed under penalty of perjury. Ohio law also provides that anyone who makes a false statement for purposes of obtaining a homestead exemption is guilty of a fourth-degree misdemeanor. Individuals convicted of such a misdemeanor are ineligible to receive the homestead exemption for the three years following the conviction.
What documentation do I need to provide to prove my disability?
If you are claiming a physical disability, you must have the Certificate of Disability for the Homestead Exemption (form DTE 105E, Rev. 11/13) signed by a physician (Note: If reason for reduction is mental disability, the physician or psychologist must hold an Ohio license). In order to qualify for the homestead exemption, an owner’s disability must be permanent and total and prevent the person from working at any substantial employment. You may also submit a current certificate from any state or federal agency that classifies you as disabled, as defined above. A disabled veteran must provide a letter or other written confirmation by the Federal Department of Veterans Affairs, or any predecessor or successor agency, showing that the veteran qualifies as a disabled veteran as described above.
The certificate is submitted as part of the application form, DTE 105A or DTE 105I (for disabled veterans), Homestead Exemption Application Form for Senior Citizens, Disabled Persons, and Surviving Spouses. The form is available from county auditors, and also on this Web site here.
For estate planning purposes, I placed the title to my property in a trust. Can I still receive the homestead exemption?
You are eligible for the homestead exemption if all of the following are true:
- You created the trust to be effective during your lifetime (an inter vivos trust)
- You provided the assets for the trust (you are the settler).
- You can terminate the trust at any time (it is a revocable trust).
- The trust agreement contains a provision that says you have complete possession of the property.
Most of the other common forms of property ownership (such as survivorship deeds) also qualify for the exemption. Properties owned by corporations, partnerships, limited liability companies and trusts other than the trust described above are not eligible for the homestead exemption because such properties are not owned by an individual. If you have questions about what constitutes eligible home ownership for the homestead exemption, consult your county auditor.
Will I have to apply every year to receive the homestead exemption?
No. However, if your circumstances change and you no longer qualify for the homestead exemption, you must notify the county auditor by the first Monday in June.
In January each year the county auditor will mail you a copy of the continuing application form (DTE 105B, Continuing Homestead Exemption Application Form for Senior Citizens, Disabled Persons, Disabled Veterans and Surviving Spouses). Please return this form to the auditor only if you no longer own the home, no longer occupy it as your primary place of residence, or if your disability status has changed.
What if I received a larger tax credit under the previous version of the homestead exemption? Will I lose out?
Taxpayers will automatically receive whichever credit is larger, and the amount of the credit received in the future cannot be decreased below the amount of savings credited on tax bills paid.
I’ll save quite a bit of money through the homestead exemption. Will this hurt my local schools?
The State of Ohio reimburses school districts and local governments for the amount of revenue taxpayers save through the homestead exemption. Local governments and schools do not lose out.