Franklin County Reappraisals

A lot of home-owners living in Columbus have received, found out, read about or heard that their properties tax appraisal has gone up, some dramatically. This has many Columbus Home Owners up in arms and outright alarmed regarding what the new tax appraisals will mean to their monthly mortgage payments.

Those who seem to have gotten 'hit' the hardest are in quickly appreciating neighborhoods like Italian Village, Olde Towne East and Merion Village. Homes here have significantly increased in value and so have their tax values. It's one of those things that everyone prefers not to think about and hopes never happens but it has happened and beginning in January, it may start effecting the bottom lines of mortgage payers everywhere. Even rents may go up to help defer the updated taxes associated with rental properties.

At the auditor's site, you can view your new tax appraisal and plug in the number to receive an estimate of what it means to your checkbook.

This just in from the Franklin County Auditor, Joe Testa . . . .

An Open Letter to the Members of the Columbus Board of REALTORS®
Joe Testa Franklin County Auditor

Some questions have been brought to my attention pertaining to my office's Tax Year 2005 reappraisal of the 400,000+ real estate parcels in Franklin County. There seem to be three main points being asked by REALTORS® which I will address here.

The reappraisal process: It is important to note that the mandated reappraisal in Ohio is a process which takes more than two years to complete, and includes data collection, site visits to each parcel, a review of sales transactions over the prior three-year period and an opinion of value set by a licensed appraiser. Sales from 2002, 2003 and 2004 were used in the establishment of the new values, which

reflect the property's value as of Jan. 1, 2005. This is unlike the traditional "fee appraisal" which generally only considers the last six months of sales information and usually includes a thorough interior as well as an exterior inspection of the property during which improvements or lack thereof that could affect the market value of the property are discovered.

So far Franklin County property owners have been notified of the new tentative values for their properties and Informal Reviews are being conducted at 28 locations throughout Franklin County. We are meeting with property owners to address any questions or concerns they may have. At this point in the process we are no longer looking at 400,000 parcels but just the ones being brought to us. While the sales ratio analysis conducted by the State Tax Department confirms that our work is always well within appraisal standards, this analysis is being conducted of the aggregate of all real estate sales in the County. That does not mean that some individual parcels wouldn't need to be adjusted in value once more specific data is brought to our attention.

Property owner input is an important part of this process due to the fact that we rarely get inside the 400,000 properties and we are not using 2005 sales in setting the Jan. 1, 2005 value for obvious reasons. This process will not be concluded until late in the year after all final adjustments are made. If REALTORS® believe that a client's tentative value is too high for the market after they have done their own analysis, they should encourage the owner to visit one of our review sites and to bring that analysis to us. We want the value to be a fair and equitable reflection of the market.

On-Line Tax Estimator: I have taken the position, as you know, to put every bit of data I have available on the web site regarding our appraisal process, tax calculations, etc. We created the tax estimator so that a proposed sale price could be used to estimate the potential tax ramifications for a given parcel with a certified tax rate.

Secondly, I have taken the steps to notify the property owners of the tentative value both in the mail and on the web site to give them ample opportunity to participate in this process. The tax estimator has been highly successful but there is a caution.

During this Informal Review period, the tentative values cannot be used with the tax estimator because the 2005 tax rate has not yet been established. The web site carries this caution adjacent to the estimator. The tax rates currently on the website are the 2004 rates which will be reduced as a result of the reappraisal we are currently conducting. Thanks to House Bill 920 passed in 1976, the effective tax rates for all voted operating levies will be reduced to offset the value increases due to reappraisals. Therefore, if the 2004 rates were used with the 2005 tentative values then the estimated taxes will be too high! New levies passed this year will be added to the tax rate and raise dependentant upon what the voters approve.

Additionally, HB 66, the State of Ohio's biennium budget bill signed into law in June eliminates the 10% property tax reduction on commercial and industrial properties, as well as some agricultural parcels beginning in Tax Year 2005. The tax estimates currently on the website for commercial and industrial properties are based on 2004 calculations, and therefore the elimination of the 10% tax reduction is not yet considered in the estimator.

The tax estimator appearing on the site beginning in January 2006 will include the elimination of the 10% reduction on affected properties, the new 2005 tax rates which will have been certified, and subsequently the tax estimator can again be used as before.

True Value. According to the Ohio Administrative Code (OAC) 5703-25-05, "true value" is the "fair market value or current market value of property and is the price at which property should change hands on the open market between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having a knowledge of all the relevant facts."

The Ohio Revised Code Sec. 5713.03 directs the County Auditor to determine the "True Value" of each parcel. This language is derived from the Ohio Revised Code and State Constitution dating back over 100 years. The law requires us to readjust the value every three years through the reappraisal or the triennial update to more accurately reflect the true value as defined in the law.

The reappraisal process is a multi-step process and we are nearing its completion. Now that property owners have been notified of their new tentative property values, we can narrow our focus from a countywide basis to individual properties. Over the course of the next few months while the values are tentative, citizens have a unique opportunity to be active participants in a governmental process before a final value determination is made.

I hope that this addresses the primary questions you have at this time. If you have others please contact me and we will be glad to address them.
Thanks, Joe Testa, Franklin County Auditor joe_testa@franklincountyohio.gov