These days, discussions about Ohio's property tax reform are unavoidable during consultations. The most common question is how much my taxes will decrease with the homestead credit rising to 15%.

At first glance, the numbers seem to indicate a significant change. However, the actual impact on the tax bill involves more conditions than expected, so let's break it down from the perspectives of homeowners and landlords.

The starting point is House Bill HB 186. Governor DeWine signed it on December 19, 2025, along with other property tax bills at the same time.

The key point is the Owner Occupancy Credit, which provides a tax reduction for homes that one owns and actually resides in. Until now, this credit was 2.5% of the tax amount.

According to the Legislative Service Commission (LSC), this rate will gradually increase. For the 2026 tax year, it will be 5.70%, 8.92% in 2027, 12.15% in 2028, and 15.38% in 2029.

However, there is an important aspect that is often overlooked. Previously, there was a 10% non-business credit applied to residential properties, regardless of whether they were owner-occupied.

This reform eliminates the 10% credit over four years and consolidates it into the homestead credit. The Lucas County Auditor has also indicated that the two credits will be merged, and the non-business credit will be completely phased out by the 2029 tax year.

From the homeowner's perspective, this means that the existing 12.5% (10% plus 2.5%) will change to 15.38% by 2029. It's not a jump from 2.5% to 15%, but rather a net increase of just under 3 percentage points.

Honestly, this might be disappointing for those who were expecting more based on the headline. Still, in neighborhoods where tax rates are continuously rising, this difference is not negligible.

On the other hand, landlords are in a different situation. Rental properties do not qualify for the homestead credit, so as the 10% credit decreases, their taxes will increase accordingly.

The Cuyahoga County Auditor explained that the structure means landlords will pay more while homeowners will pay less. Those who own investment single-family homes or condos should reevaluate their holding costs by 2029.

The second condition to check is the applicable taxes. These credits do not apply to all levies but only to those that were passed before the November 2013 election.

The same criteria are specified on the Franklin County Auditor's website. If you are in an area where many new school levies or replacement levies have been passed in recent years, the actual reduction amount will be smaller.

There is also a bill, HB 673, proposing to expand credits to all levies. However, as of early this year, it was still in the House Finance Committee, and its passage has not yet been confirmed.

The third factor is timing. Ohio's property taxes are paid in arrears, so the 2026 tax year will mostly be reflected in the 2027 tax bills.

Some counties have indicated that the effects of other reforms may start to show in tax bills from the second half of this year. Since schedules vary by county, it's best to check based on your own tax bill.

The eligibility requirements are straightforward. You must own the home and use it as your primary residence as of January 1 of the tax year in question.

If you are already receiving the 2.5% credit, typically, there is nothing else you need to do. However, many people who have moved in and purchased a home have surprisingly not applied.

If the Owner Occupied section on your tax bill is blank, you can submit an application through the county auditor's website. Franklin County can be reached at 614-525-4663 for inquiries.

This package also includes other bills. HB 335 adjusts the inside millage that is collected without resident voting to ensure it does not increase faster than inflation during re-evaluations.

HB 129 changed the calculation method for the school 20-mill floor, and HB 186 includes an inflation cap credit for school districts that fall under this floor. The significance of these measures increases in areas where property values have risen significantly due to re-evaluations.

In summary, homeowners will see a gradual increase in credits and a slowdown in the rate of tax increases. Landlords will experience a gradual increase in holding costs as credits disappear.

Therefore, if you own two homes, deciding which one to designate as your residence has become more important than before. Living in the home with the higher tax rate will yield a greater credit benefit.

If you are looking for new rental properties, it is advisable to factor in the increase in property taxes when calculating returns. Some markets may not easily absorb rent increases.

If I were a homeowner, the first thing I would do is check to ensure the credit is correctly applied to my tax bill. The rest will be implemented gradually by the law.

If I were a landlord, I would estimate the taxes that will increase each year until 2029 and plan for rent adjustments in line with lease renewals.

The specific calculations will vary from household to household based on school districts and levy compositions. If the numbers are unclear, it is best to directly inquire at the county auditor's office with your parcel number.

This reform is more of an adjustment that shifts the focus toward homeowners rather than a tax cut for all property owners. Personally, I believe the direction is correct, but I hope expectations are not set too high based solely on the headline numbers.