Property taxes pricing some out of their homes. Some relief is coming; is there a better solution?
Property taxes date back to at least the 1600s, making up an average 70 percent of local government revenue. They pay for schools, police, fire, infrastructure and more. But as property values increase so do property taxes, pricing some people out of their homes. States are scrambling to offer relief. But is it enough and are there alternatives?
Property taxes can be confusing. Ohio produced this video to make them more understandable:
With complaints of taxes skyrocketing, state lawmakers took action and passed new legislation.
Ohio property tax reform
Beginning in 2026 or 2027, Ohio property owners will benefit from five bills Governor Mike DeWine signed into law December 19, 2025. He called them “absolutely necessary.”
- House Bill 124-Puts county auditors in control of which sales data to include or exclude when calculating property values.
- House Bill 129-Changes the formula for calculating school property taxes in small and rural districts, meaning fewer tax hikes and millions in lost revenue for school districts.
- House Bill 186-Caps future tax increases for residents in small or rural school districts at inflation and it gives them credits for 2023 and 2024 when they saw big tax hikes.
- House Bill 309-Gives county budget commissions the power to reduce certain real estate taxes.
- House Bill 335-Slows the growth of “inside millage” (taxes residents didn’t vote in) by tying them to inflation.
DeWine vetoed some of the property tax legislation last year, sending lawmakers back to the drawing board and created a Property Tax Working Group which issued twenty recommendations. The group was co-chaired by former lawmaker Bill Seitz and President and CEO of the Ohio Business Roundtable Pat Tiberi, and included a county treasurer, a couple of county auditors, a mayor, county commissioners and a few school superintendents.
Seitz told Brick by Brick what prompted the need for legislation. “The problem is very simple. Real estate valuations, price valuations have greatly outstripped the rate of inflation for about the last seven years.”
While pleased that lawmakers followed through with property tax reform, he disagrees with the part of House Bill 186 that requires school districts return money that was already theirs. He says, “The school districts lawfully collected monies in 2023 and 2024 and are now going to be forced to give it back in 2026 and 2027 and that is approximately $600 million in reduced aid to public schools in Ohio.” Seitz goes on to say, “We could not have foreseen this chicanery that was pulled at the last minute, which results in the retroactive application of that new principle and that’s unfair.”
Will the changes make a difference? And what about abolishing property taxes?
Some Ohio homeowners are skeptical the legislation will give them adequate relief after increases in property values in 2023 and 2024 of 37 percent in Butler County, 34 percent in Montgomery County and 28 percent in Hamilton County.
The Journal News reports the owner of a $100,000 home in Butler County would save $213 a year under the changes and in Montgomery County it would be around $277 dollars. The Hamilton County Auditor’s Office has not yet calculated an example of savings.
One group of Ohioans, The Committee to Abolish Property Taxes, is fed up and wants to get rid of property taxes. It’s led by Brian Massie, who told Brick by Brick’s Hernz Laguerre Jr., “We started out with S.O.S., Save Our Seniors.” “And we thought we could convince the state legislators to abolish, Ohio property taxes for seniors when they hit 65. That was quickly shut down.”
Massie is trying to get enough signatures to put a measure on the statewide ballot this fall to get rid of property taxes for everyone. He’s still working through how to make up the lost money because it’s 65 percent of the budget for local governments in Ohio.
Nationally, the Tax Foundation says there’s no good way to pay for property tax repeal. Lincoln Institute of Land Policy Associate Director of Tax Policy Adam Langley read their report.
“They found that in Ohio to eliminate the property tax, the average combined state and local income tax rate would need to rise from 4.24 percent to 12.59 percent. So basically, tripling and 12.59 percent would just be a massive outlier. That’s the same as California’s top rate for millionaires.”
Brick by Brick will continue to follow this effort as well as one in Florida where Governor Ron DeSantis has proposed people with primary residences be excluded from paying property taxes. Because this is only 30 percent of the population there, the state thinks it can make up the lost revenue.
Also, beginning this year Montana will tax wealthy, out-of-state homeowners more and its permanent residents less. Why? An Op-Ed in The Daily Montanan says, “In 2023, an avalanche of out-of-state money drove home values through the roof. When the dust settled, roughly $270 million in property-tax burden had shifted onto regular Montana homeowners. A three-bedroom house in Billings was suddenly carrying a heavier relative load than the $30 million dollar mansions in the Yellowstone Club.”
What Butler County is doing
Before Ohio lawmakers passed property tax relief, Butler County Auditor Nancy Nix told the Ohio Capitol Journal, “she expected (property) values to climb another 13-25 percent, which could translate to tax increases of as much as 15 percent.”
The county isn’t standing idly by. In a news release commissioners say they have returned about $50 million to taxpayers so far through their most recent tax rollback and two previous ones in 2022 and 2024. In addition, as Brick by Brick’s Emiko Moore reports, the county also has a piggyback homestead exemption, doubling the state’s shielding of the first $28,000 of an eligible homeowner’s appraised value.
The dilemma for schools
Lowering property taxes takes money away from schools. Districts depend on levy revenue and are having to change their budgets based on actions in Columbus. They stand to lose millions of dollars. Complicating things, lawmakers have chosen not to fund the last two years of The Fair School Funding Plan.
Facing a deficit ranging from $4 million to $19 million through fiscal 2029, Hamilton City Schools announced a series of proposals January 16 to save $10 million in the upcoming school year. The proposed spending plan keeps the district out of fiscal caution. The changes, still to be voted in by the board, include:
- Closing Fairwood Elementary School and moving students to neighboring schools.
- Consolidating the preschool program to Fairwood, and contracting with the Butler County Educational Service Center to run it.
- Closing the freshman campus and moving students to Hamilton High School.
- Outsourcing school nurses to Butler County Educational Service Center.
However Superintendent Blevins says, “This does not get us out of financial concerns moving forward. We are going to have to look at some long-term planning to generate new dollars in our school district.” She hinted that might be a new operating levy. The last levy passed was in 1993.
Blevins says it’s the first time every single school district in the county is experiencing financial distress.
All twelve Butler County districts drafted a letter, calling for reform.
Alternative possible solutions
Circuit Breakers
In the Lincoln Institute of Land Policy publication Property Tax Relief for Homeowners, author Adam Langley points to circuit breakers (pg 39) as a way to make property taxes more fair.
The Institute of Taxation and Economic Policy (ITEP) explains it this way: “These policies prevent a property tax “overload” by crediting back property taxes that go beyond a certain share of income. Put another way, circuit breakers intervene to ensure that property taxes do not swallow up an unreasonable portion of qualifying households’ family budgets.”
ITEP says 29 states and the District of Columbia offered some type of circuit breaker in 2023. And more than two-thirds of states with circuit breakers extend their programs to at least some renters. Oregon provides its circuit breaker exclusively to renters.
Former Ohio Lawmaker Bill Seitz says he recommended the state take a look at circuit breakers and the legislature wasn’t interested.
In another Lincoln Land Institute study, 50-State Property Tax Comparison Study, Adam Langley explains some nuances.
He says, “While some cities raise most of their revenue from property taxes, others rely more on alternative sources.”
- Bridgeport, CT has one of the highest tax rates but city residents don’t pay any sales or income taxes.
- Philadelphia, PA has a low property tax rate but residents pay both sales and income taxes to local governments.
For the report, he studied the largest city in each state. One finding in Columbus, OH showed it’s one of only 15 cities (in the study) to impose a higher statutory tax rate on apartments than homes. Langley says, “It is not completely clear, but the evidence suggests that most of those property taxes imposed on apartment buildings are pushed through to tenants in the former of higher rent.”
Taxes on land
Taxing the value of the land eliminates taxes on any house, apartment, or business on the land and any improvements that have been made. In Ohio, a land tax might require a constitutional amendment. Pennsylvania has had a land tax on the books since 1913 and implemented it in 20 cities and counties. Results show it expanded the housing supply, combatted urban sprawl, encouraged renovation and more.
Ohio State Senator Louis Blessing III has introduced a constitutional amendment to allow for land value taxation. If adopted, it would go into effect on January 1, 2027.
Detroit considered a land value tax. Why? It has some of the highest property taxes in the nation. But it didn’t pass in the planned February 2024 vote. However, the new mayor has talked about reviving the idea.
Don’t expect the conversation around property taxes to go away anytime soon. Ohio Lawmakers are still drafting new legislation. One idea would give local governments and county commissioners the authority to lower property taxes. Another would require every county to offer payment plans. And there may be other ideas.
Home appraisal bias
Urban sociologist Junia Howell found property tax bills rose over twice as much for Hamilton County residents living in communities of color or poorer neighborhoods. She says the uneven increases in property tax bills are not explained by changes in the housing market and relative to household means.
Brick by Brick’s Hernz Laguerre Jr. reports Howell advocates adopting a taxation system that more precisely taxes residents based on their income, wealth and land access.
Philadelphia residents experienced home appraisal bias, and the city formed a task force in 2021 to try to get rid of it. Despite specialized training and the hiring of dedicated staff, new research shows it remains a potential roadblock for homebuyers in that city.
Limitations
Property taxes have become so instrumental to local governments that it’s almost impossible to get rid of them. In Ohio, they make up 65 percent of the revenue, paying for schools, police, fire, infrastructure and more. States where people own second homes have the luxury of taxing those homeowners more and their permanent residents less.
Looking ahead
With property taxes rising across the country, one study says the best defense for the homeowner is disputing assessment value, with a median savings of $500.
Cuts in property tax revenue hurt schools. Districts are taking a hard look at their finances, including Hamilton City Schools where the treasurer is projecting a $4.7-19.7 million deficit between 2026-2029 if nothing changes.
Policy Matters tax researcher Aditi Srivastava and research director Zach Schiller collaborated on a written testimony to the Ohio House Ways and Means Committee explaining the harm the bill will do to public schools.
Spectrum News reports Srivastava said, “After the legislature abandoned the Fair School Funding Plan, these additional cuts could be devastating — and the so-called tax relief they pay for is poorly targeted and irresponsible,” Srivastava said. “Property owners in Indian Hill — where the average income tops $545,000 — would receive tax cuts, while East Cleveland residents, with a median income of just $28,636, get nothing.”
Ohio lawmakers say they are still reforming the system and have six or seven “priority” bills ready for vetting early this year. Rep. David Thomas told the Journal News, “We are not going to step away from this issue.”
How do we address the challenge of property taxes? What kind of a difference can Ohio’s recent legislation make? What about other solutions like circuit breakers and a land tax? Some want to get rid of property taxes all together. How would local governments make up the difference? Brick by Brick will also be digging into other possible solutions. We want to build community around context and solutions in our cities. Your feedback is very important to the effort, as we continue to dig deeper into the responses to some of our most pressing social issues, including the housing crisis. Click on the green button below to take a short survey to help reinforce and refine our work. Thank you.
