Real Property Tax - Homestead Means Testing
The application form requires individuals to report MAGI, and it is signed under penalty of perjury. Ohio law also provides that anyone who makes a false statement for purposes of obtaining a homestead exemption is guilty of a fourth-degree misdemeanor. Individuals convicted of such a misdemeanor are ineligible to receive the homestead exemption for the three years following the conviction.
County auditors will also be able to verify MAGI using a web-based application for those who file Ohio income tax returns.
DTE Form 105H may be provided to applicants who have not filed an Ohio income tax return. DTE Form 105H is a tool for auditors to estimate Ohio income. It is not intended to be a substitute for filing an income tax return. Applicants may be asked to supply source documents such as W-2s, 1099s, etc. to verify income.
The homestead exemption allows low-income senior citizens and permanently and totally disabled Ohioans, to reduce their property tax bills, by shielding some of the market value of their homes from taxation. The exemption, which takes the form of a credit on property tax bills, allows qualifying homeowners to exempt up to $25,000 of the market value of their homes from all local property taxes. For example, through the homestead exemption, a home with a market value of $100,000 is billed as if it is worth $75,000.
For more information, including the average tax saving, please check here.
Effective beginning tax year 2020 for real property and tax year 2021 for manufactured homes, the definition of “income” has been changed for the purpose of determining eligibility for the homestead exemption. The new definition is described as “Modified Adjusted Gross Income” (MAGI). Modified Adjusted Gross Income is Ohio Adjusted Gross Income (line 3 of the Ohio income tax return) plus any business income that has been deducted in computing OAGI on line 11 of Ohio Individual Income Tax Schedule A. This business income must now be included in the income calculation used to determine eligibility for the homestead exemption.
Ohio Revised Code initially established a maximum Ohio Adjusted Gross Income (OAGI) of the applicant and the applicant’s spouse of $30,000. This maximum is to be indexed for inflation each year. OAGI can be found on line 3 of the Ohio Individual Income Tax return. With indexing, the 2022 income threshold is $34,600. The 2021 income threshold was $34,200, the 2020 income threshold was $33,600, the 2019 threshold was $32,800, the 2018 threshold was $32,200, and the 2017 income threshold was $31,800.
Newly effective for tax year 2020 for real property and tax year 2021 for manufactured homes, a law change has revised the definition of “income” from OAGI to now “Modified Adjusted Gross Income” (MAGI). MAGI is essentially OAGI plus any business income that has been deducted in computing OAGI on line 11 of the Ohio Schedule of Adjustments. This business income must now be included in the income calculation used to qualify for the homestead exemption. Previously, certain eligible property owners were able to deduct up to $250,000 of business income from their OAGI, dropping them below the income threshold and allowing them to claim the homestead exemption. This previous practice is no longer allowed.
If your spouse died during the previous year, and if you received the homestead exemption credit on the tax bill you paid in the current year, only because your spouse met the age or disability criteria, you do not need to file a new application for the exemption. If you were at least 59 at the time of your spouse’s death, you will continue to qualify.
- Qualifies under the means-test and.
- Is at least 65 years old or turns 65 in the year for which they apply; or
- Is totally and permanently disabled as of January 1 of the year for which they apply, as certified by a licensed physician or psychologist, or a state or federal agency; or
- Is the surviving spouse of a person who was receiving the previous homestead exemption at the time of death, and where the surviving spouse was at least 59 years old on the date of death.
Since applications for real property are filed in the year for which homestead is sought, the owner must be 65 by December 31 of the year the application is filed. For manufactured or mobile homes, applications are due in the year preceding the year for which homestead is sought. Those applicants must be 65 years old, or turn 65 during the year following the year in which they apply.
To qualify, an Ohio resident also must own and occupy a home as their principal place of residence as of January 1 of the year, for which they apply, for either real property or manufactured home property. For individuals who own more than one home, the principal place of residence is the home where the person is registered to vote, and the person’s place of residence for income tax purposes.
In January each year the county auditor will mail you a copy of the continuing application form (DTE 105B, Continuing Homestead Exemption Application Form for Senior Citizens, Disabled Persons, and Surviving Spouses). Please return this form to the auditor only if you no longer own the home, no longer occupy it as your primary place of residence, if your disability status has changed, or if your income has changed.
If you believe your application was improperly denied, you may appeal the auditor’s decision to the county Board of Revision by filing form DTE 106B, Homestead Exemption and 2.5% Reduction Complaint, on or before the deadline for paying the first-half taxes for the year for real property (in most counties, the due date is in January or February of the following year). Owners of manufactured or mobile homes may also appeal the denial of a homestead exemption application, but their complaint forms must be filed no later than January 31 of the year immediately following the year of the denial. The complaint form is also available from county auditors.
The state of Ohio reimburses school districts and local governments for the amount of revenue taxpayers save through the homestead exemption. Local governments and schools do not lose out.
The disability certificate, DTE 105E, Certificate of Disability for the Homestead Exemption, must be attached to the general homestead exemption application. The certificate is also available from county auditors.
In 1970, Ohio voters approved a constitutional amendment, permitting a homestead exemption that reduced property tax for lower income senior citizens. Then in 2007, the General Assembly expanded the program to include all senior citizens, regardless of their income. In 2014, the state of Ohio reinstituted means/income testing to determine eligibility for the homestead exemption. Program participants who became eligible and who received the homestead exemption between 2007-2013 retain the exemption, regardless of income.
Also in 2014, the exemption was increased from $25,000 to $50,000 for veterans, regardless of income, who are permanently and totally disabled from a service-related experience. In 2021, a homestead exemption of $50,000 with no means test was extended to surviving spouses of public safety personnel killed in the line of duty.