By: Kris Brandenburg and Patrick Newton
As 2014 comes to a close, now is the time to start considering next year’s property tax bills. This year represents a significant period as the valuation reappraisal period is in process for three Southwest Ohio counties. Butler and Clermont County are currently in the midst of completing their required sexennial reappraisals, which often result in a whole-scale of changes in values which will be provided to taxpayers by the end of September. Hamilton County is conducting their triennial update with new values being sent to property owners around the same time. Rather than be caught off guard, now is the time to start considering whether you would like to file a complaint against the valuation of your real property. The best time to file a value complaint is during these reappraisal years, and we anticipate that this will hold true in 2015 because this is the time when values may fluctuate the most, and limitations on filing multiple times during the appraisal periods means that filing earlier in the reappraisal period gives a taxpayer the largest benefit from any achieved reduction in value.
We anticipate that property values around the region will be increasing in this upcoming period. However, property owners should not evaluate the merits of their case by focusing solely on an increased valuation and a higher tax bill. To ultimately prevail in reducing the value of the property, the owner must confront certain questions the County Board of Revision will ask at the hearing. What is the property worth on the open market? What do similar properties in comparable locations sell for? For a commercial property, what value results from dividing a stabilized net operating income by a market-derived capitalization rate? For properties acquired within two years from the relevant tax date, what was the sale price? For newly built improvements, what was the construction cost? The answers to these questions will indicate whether a valuation complaint stands a reasonable chance of success and to what extent a reduction in value will make economic sense. Keep in mind that the taxable value of real property in Ohio is 35% of the total value of the property, and therefore a $100,000 reduction in total value only results in a $35,000 reduction in taxable value.
Property owners who file valuation complaints must be prepared to present probative evidence from credible sources at the valuation hearing before the Board of Revision. Although owners are free to testify on their own behalf, the testimony of qualified appraisers carries the most weight. Appraisal reports to be introduced at a hearing should be submitted to the Board of Revision no less than ten days before the hearing. If you feel the Auditor’s tax valuation for your property is too high, we recommend that you contact a qualified appraiser as soon as possible to review the County’s valuation and to give you a clear idea as to what he or she feels would be an appropriate valuation. We also can assist in advising you as to whether to file a tax complaint, and discuss valuation strategies and all aspects of tax valuation issues. All complaints are due prior to March 31 of 2015, but to put together the best case for a reduction, steps should be taken to secure an appraiser or a thorough analysis of the property’s income to determine whether such a complaint can yield the desired results.
Strauss Troy represents owners and school districts in property valuation cases involving office, industrial, retail, apartment and residence property as well as special use properties before County Boards of Revision, in state court, in the State Board of Tax Appeals and the Supreme Court of Ohio. Frank Klaine, Patrick Newton and Kris Brandenburg can assist owners in evaluating potential valuation reduction claims and guide owners through the complicated valuation appeal process.