Ohio Real Property Tax Reform: Five New Bills Signed Into Law

By Gene R. Abercrombie, Esq.

In 2025, the Ohio General Assembly focused on providing Ohioans relief from rising property taxes and preventing unvoted tax increases. This effort resulted in the passage of five real property tax-related bills: House Bills 124, 129, 186, 309, and 335. Although Governor DeWine acknowledges that these bills are not perfect, he believes they will “provide meaningful relief to Ohioans in all corners of the state, while also protecting the

critical services that are provided to all of us through the funding generated by property taxes.” The bills were signed into law on December 19, 2025, and will take effect on March 20, 2026.

What Changes Do These Bills Make?

House Bill 124, also known as the “Flip the Script” bill, empowers county auditors to have greater oversight in determining which property sales information is used for property valuations. Previously, the Ohio Department of Taxation used its sales data to require counties to adjust valuations by certain amounts, which county auditors could then appeal. Under the new law, county auditors will control which sales data is used

to determine valuation adjustments. This means the burden will now be on the Department of Taxation to challenge sales. The goal of this bill is to emphasize local input in the property reappraisal process to ensure fair property evaluations.

House Bill 129 is aimed at protecting homeowners from unchecked real property tax increases caused by school district levies. In Ohio, real property taxes are measured in “mills,” with each mill equal to $1 of tax per $1,000 of assessed real property value. Since 1977, school districts have had a 20-mill floor which is meant to guarantee districts a baseline of funding. Under previous law, not all school district levies counted

toward this 20-mill floor, which allowed districts to collect additional taxes beyond the floor, resulting in higher overall real property tax bills. Under House Bill 129, emergency, substitute, incremental growth, and conversion levies, as well as the real property tax portion of combined levies, will count toward the 20-mill floor, preventing future spikes and providing voters with greater transparency. The bill still allows school districts some flexibility for funding through alternative levy options. School districts with an existing

emergency or substitute levy may renew such levies once as “fixed sum levies,” but these may only be levied for up to five years. Schools in fiscal distress or under a disaster declaration are also able to levy a new onetime 5-year “fixed sum levy” to cover current expenses. Overall, the goal of this bill is to prevent tax hikes without the approval of voters.

House Bill 186 establishes a new “Inflation Cap Credit” that limits school district real property tax increases to the rate of inflation. This bill authorizes a real property tax credit for property owners in a school district or joint vocational school district if the district’s revenue from its 20-mill floor surpasses inflation rates. A district’s revenue growth from its 20-mill floor may no longer exceed the cumulative inflation rate over the preceding three years. House Bill 186 also adjusts the calculation of a school or joint vocational school

district’s real property valuation under the state’s school funding formula to offset any lost revenue resulting from the credit. Property owners will see a reduction in their taxes; however, school districts will not lose funding because the state will compensate them for lost local revenue. Lawmakers estimate this bill will save Ohio property owners nearly $1.7 billion over the next three years. The owner-occupied tax credit program is also updated under House Bill 186 by phasing out the nonbusiness credit, except for agricultural property. This change prioritizes owner-occupiers and is estimated to provide $800 million in relief for Ohio homeowners over the next four years.

House Bill 309 lowers real property taxes by expanding the county budget commission’s authority to modify levies and trim millage rates. County budget commissions are composed of the county auditor, treasurer, and either the prosecuting attorney or county commissioner. House Bill 309 allows county budget commissions to reduce millage on any voter-approved levy, excluding debt levies, if the commission deems the revenue is

“unnecessary” or “excessive.” Unnecessary collections are “those beyond the reasonably anticipated financial needs of the taxing authority for the specific purpose of the tax after accounting for current fund balances, projected expenditures, and other available funding sources”. “Excessive collections” are those in an amount or at a rate that exceeds what is required to provide services at a level that is consistent with statutory obligations. Although the county budget commission has this reduction authority, it must first provide the

taxing authority that collects the levy an opportunity to present information it considers relevant regarding the extent to which the levy should be reduced. Therefore, the county budget commission maintains authority to lower taxes by reducing unreasonable levies, but those requesting levies still have an opportunity to show that their levies are necessary.

House Bill 335 limits inside millage collections to the rate of inflation in order to prevent large spikes in unvoted tax increases and to provide tax relief to property owners. To accomplish this, county budget commissions are directed to adjust the rate of each inside millage levy so that it does not grow by more than the cumulative inflation rate over the three previous years. Lawmakers estimate that this provision will provide between $621 million and $763 million in property tax relief over the next three years. House Bill 335

also authorizes counties to offer an additional real property tax exemption that builds upon the existing homestead exemption, potentially doubling eligible homeowners’ homestead exemption amounts. This additional exemption targets the same eligible groups, such as low-income seniors aged 65+, permanently disabled individuals, totally disabled veterans, and surviving spouses of fallen first responders.

Conclusion

These bills collectively aim to lessen the burden of property taxes in Ohio. Lawmakers anticipate these bills will save taxpayers an estimated $2.4 billion over the next three years. There is some concern regarding the corresponding loss in future revenue to schools and other local governments; however, Governor DeWine contends these reforms are necessary and strike a much-needed balance between providing relief for property owners and continuing to fund schools and local government. Please feel free to contact our office

for more information or to discuss how these reforms may affect you.

Mr. Abercrombie is a Partner in the Business Group of Semro Henry Ltd. To contact him please call (419) 517-7377 or email abercrombie@semrohenry.com

Mr. Abercrombie gratefully acknowledges the assistance of Morgan Miller, a Third Year Law Student at the University of Toledo College of Law. Ms. Miller will be starting as an Associate with Semro Henry Ltd. following graduation and Bar passage.