New Ohio Law Presents Real Property Tax Reduction Opportunities

On April 27, 2021, Governor DeWine signed into law Senate Bill 57, which impacts Ohio real estate tax complaints. SB 57 goes into effect on July 26, 2021 and makes two important changes benefitting all property owners and tenants of commercial and industrial properties in Ohio.

Historically, only owners of real property were among a limited group authorized to file complaints challenging the value of real property. Effective July 26, 2021, tenants of properties classified as commercial or industrial, whose leases require the tenant to pay all property taxes charged to the property, and who are authorized by the property owner to file real estate tax complaints, may themselves file complaints with county Boards of Revision challenging the value of the property they lease. This is a procedural boon for single occupancy tenants, which commonly bear the brunt of real property tax under triple net leases.

In addition, SB 57 enables property owners (and now tenants) to seek a new valuation for tax year 2020, based upon a tax lien date of October 1, 2020. This amendment is designed to relieve excessive tax burdens for properties that have been negatively impacted by the COVID-19 pandemic. Accordingly, an owner or tenant can file a new complaint seeking a determination of value as of October 1, 2020 if the complainant describes with particularity how circumstances related to the COVID-19 pandemic or a state COVID-19 order caused a reduction in value between January 1, 2020 and October 1, 2020. Examples of properties that could most benefit from this new valuation date would be income-producing properties, such as hotels, parking garages, restaurants, and other commercial retail space where net operating income has decreased.

Property owners and qualified tenants should note that the window of opportunity to seek a new, COVID-related decrease in property value is narrow. Any complaint seeking to reduce value due to COVID-19 must be filed within the 30-day period between July 26, 2021 and August 25, 2021.