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Potential tax relief for commercial property owners negatively affected by COVID-19

| Aug 20, 2021 | COVID-19, Pandemic, Real Estate, Tax Breaks

Unbeknownst to many Ohioans, on Aug. 3, Gov. Mike DeWine signed into law Senate Bill 57, which can assist real property taxpayers who believe the value of their property has declined as a result of the COVID-19 pandemic.

The law specifically allows eligible taxpayers to file a special COVID-19 complaint with their county board of revision requesting that a property’s tax valuation for tax year 2020 be determined as of Oct. 1, 2020, instead of the Jan. 1, 2020. Prior to the passage of this recent legislation, a real property taxpayer was only permitted to file one complaint in each three-year valuation period if they disagreed with their assessed tax value. However, the new law allows a real property taxpayer to submit a COVID-19 complaint, even if they have already filed a standard challenge to their property’s value.

In order for a real property taxpayer to qualify for this special COVID-19 relief, the taxpayer must demonstrate that the real property’s value has been reduced due to circumstances related to the COVID-19 pandemic or a COVID-19-related order issued by the governor or a state agency, the special complaint must be filed on or before Sept. 2, 2021 and the special complaint must state with particularity how the COVID-19-related circumstances caused the reduced real property value.

After the complaint is submitted, the taxpayer will be scheduled for Zoom hearing at a later date. If a COVID-19 complaint is successful, and the board of revision shall adjust the tax value of the property which will then alter the taxes payable in 2021. For those taxpayers who bring a successful complaint and have already paid their 2021 taxes, the local county auditor should issue a refund to the taxpayer in the amount the taxpayer overpaid.

While both commercial and residential real property taxpayers are eligible to file a special complaint, because home values have generally remained strong through the pandemic, it may be difficult for a residential property owner to show that their property’s value should be reduced due to the pandemic. As a result, the new complaint program is more likely to benefit owners of commercial properties instead of residential owners since many commercial property owners experienced income losses as a result of the pandemic.

In addition to the tax relief described above, the same law authorized a property tax exemption for housing primarily used by individuals diagnosed with mental illness or substance use disorder and their families. To qualify, property must use the property to provide housing, lease the property to individuals with mental illness or substance use disorder and make supportive services available to such individuals, or lease the property to a charitable institution.

It is important that any taxpayer and/or property owner wishing to file a COVID-19 special com-plaint carefully review the specifications and requirements of the new law prior to filing since a complaint can be summarily dismissed if a complainant fails to provide all the requested documentation and information with their initial complaint. In addition, taxpayers with properties negatively affected by the COVID-19 pandemic or state COVID-19 orders should move quickly to consult with appraisers and legal counsel to determine whether a special tax year 2020 complaint is in their best interests as special 2020 complaints must be filed between July 26, 2021, and Sept. 2, 2021.

This article originally appeared as a column for the Cleveland Jewish News.