Stephen K. Hall, JD, LLM – Member
Act Fast for Ohio Real Estate Tax Savings: Deadline Looming for "Covid-Complaints"
Owners of Ohio property who wish to contest their 2020 real property tax values because the owners believe the property’s valuation should be reduced as a result of the COVID-19 pandemic’s impact on the valuation between January 1, 2020 (the normal lien date for value) and October 1, 2020 (the "pretend" lien date for value because of the new special law) should consider filing a complaint between August 3 and August 25 to preserve their rights to potentially reduce their real estate tax burden. The special law has become known as the “Covid-Complaint” rule.
The special tax valuation law (contained in Ohio Senate Bill 57) was targeted generally at those types of income producing properties that on January 1, 2020 were not doing too badly, but then as of October 1, 2020, based on the COVID-19 pandemic and public health emergency issues, including stay at home orders, were struggling, as compared to nine months earlier, on January 1.
The policy reason for the law was based generally on the fact that Ohio’s real estate tax system is backwards looking. It was seen as unfair for property owners to be required to pay tax based on pre-pandemic factors that existed on January 1, 2020 (before COVID-19 hit the U.S. market) when the economic reality is that by October 1, the world had changed. Nothing in the law states that the Covid-Complaint rule only applies to income producing properties, but income producing properties (like hotels and sit-down restaurants, as well as hospitality properties) that had significant decline in clients were the impetus for the law’s enactment.
For those that wish to use the October 1, 2020 “pretend” lien date instead of the typical January 1, 2020 date, here are the major elements and considerations to analyze:
An eligible person that files such a valuation complaint shall allege with particularity in the complaint how [the COVID-19 pandemic or a state COVID-19 order] *** caused the reduction in true value of the property, between January 1, 2020 and October 1, 2020.
The board of revision shall dismiss a valuation complaint that merely alleges a general decline in economic or market conditions in the area or region in which the property *** is located.
Notwithstanding division (A)(2) of section 5715.19 of the Revised Code, an eligible person may file a valuation complaint authorized under [the new provision regarding October 1, described above] ***, regardless of whether that eligible person filed a complaint under section 5715.19 of the Revised Code relative to that parcel for any preceding tax year in the same interim period.
This element addresses the general rule that an owner may only file one complaint per tax valuation triennium unless an exception applies.
If the valuation challenge is successful, the BOR will adjust the property’s true value for Tax Year 2020 to reflect the diminished valuation as of October 1, 2020.
Property owners should consider whether obtaining appraisal evidence specific to the valuation date of October 1, 2020, would be helpful to carry their burden of proof, as would a different appraisal, valued as of January 1, 2020.
A complaint must be filed no later than 30 days after the effective date of Senate Bill 57 (the bill in which the special law was enacted). To be safe, due to some disputes about the date the bill became effective, and when the bill’s temporary application terminates, the safest window to choose to file the complaint is the time frame between August 3, and August 25, 2021.
Our attorneys have experience in practice before county boards of revision, the Ohio Board of Tax Appeals, Ohio’s appellate courts, and the Ohio Supreme Court on Ohio real estate tax matters and other state and local tax matters. If you wish to discuss the “Covid-Complaint” rules or any other tax issue, please contact Steve Hall, or any of our professionals.