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Ohio Property Tax Updates

UPDATED march 2025

Ohio Revised Code 5713.031 and the Valuation of Federally Subsidized Residential Rental Property

ORC 5713.031 has changed the way many affordable housing properties are valued in Ohio.  While the Code became effective October 3, 2023, Ohio taxing authorities and practitioners have been waiting for the associated administrative rule to be finalized to provide clarity for its application.  That administrative rule is expected in the coming months.

ORC 5715.01(A)(4) outlines the uniform rule for determining the value of federally subsidized residential rental property and includes a formula for doing so.  The formula is based on the income approach to value and requires property owner action.  To seek valuation under the new process, a property owner must submit audited income and expense statements (up to three years) which include an allowance for vacancy and credit loss along with contributions to replacement reserves. 

The formula itself presumes an allowance of 4% for vacancy loss and replacement reserves of 5%, although presumptions of both can be rebutted and percentages can be exceeded with evidence from the taxpayer.  The respective 4% and 5% set the floor.  5715.01 also prescribes a minimum valuation equal to the greater of $5,000 multiplied by the number of property’s units, or 150% of the property’s unimproved land value.

The Code and methodology apply to housing projects restricted under Section 42 of the Internal Revenue Code, properties that receive assistance under Section 202 of the Housing Act of 1959, properties that receive assistance under Section 811 of the Cranston-Gonzales National Affordable Housing Act, Section 8 project-based assistance properties, and properties receiving assistance under Section’s 515, 521, and 538 of the Housing Act of 1949.

It is not mandatory that properties be valued using the formula.  Taxpayers must seek review of their financial information and submit it to their county auditor/fiscal officer/appraisal department by March 1 of the year before the property is put into service and after the commencement of the property’s operations, and every third year when there is a county reappraisal or update.

While property owners have been able to use the formula since its effective date, the absence of the associated administrative code has led to some uncertainty for tax practitioners in the State.  While we’ve seen assessments reduced based on submissions, disclosure of how reductions are being calculated remains a relative mystery.

Who is performing the review of the financial information?  Is it the auditor, the appraisal department, or some other body?  Is there an internal audit of the review?  Can the decision be challenged/appealed and if so, is that in the form of a complaint and legal proceeding through the board of revision?  If a property is subject to a reduction through the formula and also a board of revision value change, which one takes precedence?

Our firm and tax practitioners across the state anxiously await the publishing of the administrative code to help answer these, and many other questions.  Updates will follow.


Kristopher Nicoloff
Siegel Jennings Co., L.P.A.
American Property Tax Counsel (APTC)

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