OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
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H.B. 60 Bill Analysis
135th General Assembly
Click here for H.B. 60’s Fiscal Note
Version: As Introduced
Primary Sponsor: Rep. Troy
Effective Date:
Zachary P. Bowerman, Attorney
SUMMARY
Increases the homestead exemption for elderly or disabled homeowners and certain of
their surviving spouses from $25,000 to $40,000 of the home’s appraised value or cost.
Indexes the amount of that homestead exemption so that the exemption and resulting
tax savings increase in proportion to the increase in inflation.
Expands eligibility for that homestead exemption by rising the income threshold one
may have to qualify for the exemption, currently $36,100 in modified Ohio adjusted
gross income, to $45,000.
DETAILED ANALYSIS
Homestead exemption
The bill increases the amount of the homestead exemption for elderly homeowners or
homeowners with a permanent and total disability and certain of their qualifying surviving
spouses and indexes that amount to inflation. The bill also expands eligibility for the homestead
exemption by raising the income eligibility requirement above which a taxpayer may not claim
the exemption.
Homestead exemption: overview
Continuing law provides a property tax credit for the residence, or “homestead,” of
certain qualifying individuals. To qualify, an individual must be a homeowner who is 65 years of
age or older, permanently and totally disabled, or at least 59 years old and the surviving spouse
of an individual who previously received the exemption. Under current law, this “homestead
exemption” equals the taxes that would be charged on up to $25,000 of the true value of a
home owned by a qualified elderly or disabled homeowner. (“True value” is the appraised fair
market value.) In other words, the homestead exemption essentially exempts $25,000 of the
value of a homestead from taxation. The amount of the tax savings for a qualifying homestead
depends on the local tax rate: the higher the tax rate, the greater the tax reduction. Under
March 9, 2023
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continuing law, special “enhanced” exemptions of $50,000 of a homestead’s value are available
for homes of military veterans who are totally disabled and for the homes of surviving spouses
of public service officers killed in the line of duty.
Exemption amount
The bill increases the $25,000 homestead exemption to up to $40,000 of the true value
of a home owned by a qualified elderly or disabled homeowner. Under continuing law, the
credit applies to manufactured and mobile homes as well, regardless of whether they are taxed
as real property or taxed under the manufactured home tax (except that manufactured and
mobile homes are assessed at 40% of cost or market value and are depreciated over time).
The bill also indexes the amount of this homestead exemption so that the exemption
amounts – and therefore the tax savings – increase according to increases in the prices of all
goods and services composing the national gross domestic product (GDP). The bill does not
index the amount of the special $50,000 enhanced exemptions.
The adjustments are made by multiplying the current year’s exemption amount by the
percentage increase in the GDP deflator over the preceding year, adding that result to the
current exemption amount, and rounding the result to the nearest $100. An adjustment would
not be made for any year the GDP deflator does not increase.
The Tax Commissioner must compute the adjustments and certify the resulting amounts
to each county auditor by December 1 to be applied the following tax year, or, in the case of
the manufactured home tax, the second ensuing tax year. The difference in application is
accounted for by the fact that the manufactured home tax is payable on a current-year basis,
whereas property tax is payable in arrears.1 Because of this, the bill’s adjustment and
certification requirements begin to apply in tax year 2023 or, for the manufactured home tax,
2024, which means that the exemption amounts might first increase for taxes payable in 2024.2
Income threshold
Under continuing law, homeowners who first receive the $25,000 homestead
exemption for tax year 2014 or later (or tax year 2015 for homeowners who pay the
manufactured home tax) must have a modified Ohio adjusted gross income of below a certain
income threshold, as computed for state income tax purposes (including all business income
and excluding Social Security and disability benefits). The threshold was originally $30,000, but
it is indexed to inflation and increases annually – the 2023 threshold is $36,100. Homeowners
who received the homestead exemption before 2014 are not subject to this income limit, and
no income limit applies to the enhanced exemptions. The bill raises the income eligibility
requirement to $40,000 or less beginning in tax year 2023, or 2024 for manufactured homes.3
1 R.C. 323.152(A)(1)(c) and (d) and 4503.065(A)(2)(c), (d), and (e).
2 Section 3.
3 R.C. 323.152(A)(1)(b) and 4503.065(A)(2)(b); Section 3.
P a g e |2 H.B. 60
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
HISTORY
Action Date
Introduced 02-21-23
ANHB0060IN-135/ks
P a g e |3 H.B. 60
As Introduced
Statutes affected: As Introduced: 323.152, 4503.065