Cuyahoga County Property Taxes – Why has your cost increased climbed while values have declined?

In Cuyahoga County, home values have decreased 18%  from  2008, so you’d think that your bill (which should be based on your home’s value) would decrease.  Well, not necessarily. The property tax bills are as high as ever for many homeowners across the northeast Ohio area that must pay the first half of their 2012 bills over the next several weeks.  Property tax rates appear to have increased nearly everywhere.   Most of the increases are the result of new taxes approved by voters. In other cases, declining home values have led to an increase in rates so levies approved years ago could collect as much money as before or as needed to provide the level of services promised to residents.  The majority of the money collected from property taxes goes to fund local school systems.  In addition, cities, townships, park districts, libraries, counties and community colleges also receive portions of the funds.  Most local property tax increases are the result of voter approval.

Cuyahoga County is set to reappraise property values this year (2012) and when it does it may only then absorb the full force of the housing market losses caused by the recession.  The estimated potential losses in property values and the county’s tax base impact could be significant.  Property values in Cuyahoga County are 18% lower than in 2008 (48% in the city of Cleveland), with the outer ring suburbs faring the best.

 

Brian Bull (of NPR) recently did a good story on the topic at “How Property Taxes Climb, Even If Home Value Drops” and you can listen to the story at:  http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=145482829&m=145500284

In Cuyahoga County, a homeowner’s property taxes are calculated using three factors:

  1. The value of your property as determined by the County Fiscal Officer.  Properties were revalued by the County during the 2009 Property Value Update. Based on recent economic conditions, most properties in Cuyahoga County experienced a  reduction in property value.
  2. The tax rate established in your communityTax rates change when the voters within a community approve new levies.  Examples of levies that passed during 2011 which appear on some community current tax bills are: Parma City Schools, Olmsted Falls, Cleveland Heights/University Heights Schools, Orange City Schools, and Seven Hills.  Your cost increase per $100,000 value of your home can be found at http://treasurer.cuyahogacounty.us/en-US/tax-increase-explanation
  3. Tax reductions, credits and rollbacks established by Ohio law.

Tax Reduction Factors include:

  • The HB 920 reduction factor, mandated by Ohio law, is designed to keep tax revenues stable when property values increase or decrease. The factor that prevented your taxes from dramatically increasing when property values were on the rise will now keep your taxes from significantly decreasing despite declining property values. This reduction factor will keep the revenue to our schools, cities, libraries, etc. at nearly the same level as originally approved by the voters. A portion of your tax rate is not affected by the tax reduction factor and will result in a slight decrease in your tax bill.
  •  10% Rollback: Taxes on all residential and agricultural properties are reduced by 0%.Commercial properties are not eligible for this reduction.
  •  2.5% Reduction: Owner-occupied properties are entitled to an additional 2.5% reduction in taxes. Every property owner that resides in their own property in Cuyahoga County is due a 2.5% homestead reduction on their property tax bill.  You must own and occupy your home as of January 1st of the year you file for the reduction.  Homeowners must make application for this reduction.  If you believe you are eligible but are not receiving this tax reduction, call 216-443-7089 for an application. 
  • Homestead Exemption: If you are age 65 or older or totally & permanently disabled and own & reside in your own home you are eligible for the Homestead Exemption. This exemption will reduce your taxable property value.  The application for Homestead Exemption Application for Senior Citizens , Disabled Persons and Surviving Spouses, can be obtained by clicking this link {link to PDF at http://fiscalofficer.cuyahogacounty.us/pdf_fiscalofficer/en-US/DTE_105A_08.pdf or you can also contact me at lisahumenik@remax.net.

 To access the actual rates for each Cuyahoga County Suburb click: http://treasurer.cuyahogacounty.us/pdf_treasurer/en-US/taxesbydistrict/2011_ResidentialRates.pdf

View a picture of Northeast Ohio property tax rates by suburb at http://media.cleveland.com/datacentral/photo/2011-property-tax-ratesjpg-dadcebd8be291385.jpg

To calculate the estimated taxes for a property, simply take the market value and multiply by the tax rate.  If a $100,000 home in Rocky River that is Owner Occupied has a rate of 2.4%:

$100,000 x 2.4% = $2,400 = Estimated yearly taxes

The Cleveland Plain Dealer analyzed changes in property tax rates over six years to cover two complete home appraisal cycles for communities in its seven-county coverage area to analyze the issue.  What they found is that during the last six years, tax rates increased in 95 percent of the taxing districts across Cuyahoga, Geauga, Lake, Lorain, Medina, Portage and Summit counties.   In addition, in more than a fourth of the cases, the tax rates are up at least 20 percent. It comes as a surprise to many homeowners who have seen home values plummet by double-digit percentages as fallout from the recession and foreclosure crisis, per the PD.

Among the findings in analyzing the changes over the last six years for the seven counties in Greater Cleveland, the Plain Dealer found:

•Tax rates continue to be the highest in Cuyahoga County, with bills typically running more than $2,000 per year for each $100,000 of home value.

•The property tax rates exceed $2,600 per $100,000 of home value in 20 places in Northeast Ohio, all of which are in Cuyahoga County

The highest tax rates ( based on a $100,000 home valuation) — are in the ommunities in the Shaker Heights (3.63%) and Cleveland Heights-University Heights (3.32%).  On the west side, Lakewood (2.9%), Olmsted Township (2.78%), North Olmsted (2.77%), and Bay Village (2.71%) are among the highest.

See the entire article at http://www.cleveland.com/datacentral/index.ssf/2012/01/property_tax_rates_increase_ac.html

 Homeowners who do not agree with the valuation of your property as determined by the county, have the right to file a challenge with the Cuyahoga County Board of Revision.  The purpose of a challenge is to show that the valuation of your property, as set by the County Fiscal Officer, is incorrect. To do so you must present evidence of the property’s fair market value. The best evidence is usually the recent sale price of your property (proven by relevant documents such as your closing papers). If your house has not been sold recently, you should be prepared to demonstrate the recent sale price of comparable homes.  Evidence of the condition of the property, including photographs, may also be useful.

Please keep in mind that Board of Revision hearings focus on property values, NOT taxes. Separate from your property’s value review, some property owners may see real property tax bill increase due to recent levies passed by voters in their school district, cities, villages, or township.  Ohio’s Cuyahoga County projects that there will be 26,000 property valuation complaints this year, almost twice the number from 2011.

If you are going to protest your valuation, it is best to be prepared with your case.  If you think the value of your home is less than the county appraised tax value and want your property taxes re-adjusted, you can file a complaint with the county to request a reduction.  You can apply for this reduction starting December 1st (and only up to March 31st, 2012).  You can get
info on the application process at http://bor.cuyahogacounty.us/complaint.asp.

The dilemma in Cuyahoga County and in cities across the country is how to balance their budgets and key the level of public services in light of decreased property values.  The result of the 2012 tax valuations will soon determine some important decisions for local residents and lawmakers.

Please feel free to contact me with any questions.

Lisa Humenik, RE/MAX Crossroads – lisahumenik@remax.net (440) 476-4959

 

 

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