The Ohio Homestead Tax Exemption

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The Ohio Homestead Tax Exemption

Are you 65 or older?  Are you under 65 and disabled?  If so, you may be eligible to receive the homestead exemption to reduce your property taxes.

The homestead exemption applies to owner-occupied residences for individuals 65 or older, or under 65 and disabled whose adjusted gross income is less than $31,800.

If you qualify for the homestead exemption, you will be able to exempt up to $25,000 of your property value from taxation.  For example, if your property is valued at $100,000 by the county auditor, you will be taxed only on $75,000 of its value.  The exemption cannot exceed the value of your property (if your property is valued at $15,000, your exemption will be $15,000).

In Franklin County, the property tax reduction varies by tax district, but the reduction generally falls within the $400-$800 range per year.

The homestead exemption was created as an Ohio Constitutional Amendment in 1970.

Under the original homestead exemption, only low-income senior citizens were eligible for the credit.  In 2007, the Ohio Legislature expanded the program to include all homeowners who were either 65 or older or permanently and totally disabled, regardless of their income. In 2014, the Homestead Exemption again imposed an income test and expanded the homestead exemption to disabled veterans.

Currently, an individual can qualify for the homestead credit if he or she meets the following criteria:

  1. The individual must own and occupy the home as the primary residence as of January 1 in the year he or she applies
  2. Meet one of the following:
    1. Be 65 years old (or turn 65 by December 31 in the year he or she applies); or
    2. Be totally and permanently disabled as of January 1 in the year he or she applies (as certified by a licensed physician or psychologist); or
  3. Have total income (applicant and applicant’s spouse) that does not exceed $31,800 (2017).  Income for purposes of the homestead exemption credit is the Adjusted Gross Income for Ohio income tax (line 3 on the Ohio income tax return).

So long as one of the owners of the property meet the eligibility requirements, the property will receive the homestead exemption credit.  An eligible owner’s surviving spouse may continue receiving the credit so long as the surviving spouse was 59 years or older at the time of the eligible owner’s death.

Individuals who qualified for the homestead exemption in tax year 2013 will not be subject to the income requirement and are “grandfathered in” to the continuing property tax reduction.

Additionally, veterans may qualify for the homestead exemption if they own and occupy the property as their primary residence as of January 1 in the year of application, was discharged or released from active duty under honorable conditions, and have received a total disability rating (or a total disability rating for compensation based on the individual’s un-employability for a service-connected disability or a combination of service-connected disabilities).  The exemption for veterans is $50,000, rather than the standard $25,000 for nonveterans.

The homestead exemption ties to the individual and not to the property.  If you qualify for the homestead exemption and purchase a new property, the homestead exemption will transfer with you.  You do not need to meet the current eligibility criteria or reapply.  You will need to notify the county auditor that you have moved to ensure that the credit gets applied correctly.

If you receive the homestead exemption credit and your circumstances change, you must notify the county auditor by the first Monday in June of the tax year in which your circumstances have changed.  In January each year, the county auditor will send a notice regarding continuing eligibility, and that form can be used to report changes.

In some Ohio counties, the homestead exemption will entitle you to a decreased transfer tax on the sale of your home.  For example, Franklin County typically charges a .2% transfer tax on the sale of real property.  For a Franklin County resident who qualifies for the homestead exemption, he or she will only pay a .1% transfer tax on the sale.

Applications for the homestead exemption must be filed on or before December 31 in the tax year for which the credit is sought.  Once a property owner is approved for the credit, he or she does not need to reapply each year thereafter.

You can obtain homestead applications and change of circumstances forms by contacting your county auditor.  In Franklin County, you can access the forms online here.

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