Ohio has adopted a sweeping package of property tax reforms aimed at addressing rising tax bills and improving predictability for homeowners and businesses. The new laws, passed by the Ohio General Assembly and signed by Governor Mike DeWine, represent the most significant changes to Ohio’s property tax system in years and will begin affecting tax bills in the 2026 tax year and beyond.
Why Property Tax Reform Was Needed
In recent years, rapidly increasing property values—particularly following the pandemic—led to sharp increases in property tax bills across Ohio. Many property owners were surprised to see substantial tax hikes even though they had not voted for new levies. This prompted widespread concern among homeowners, seniors on fixed incomes, and small business owners, and ultimately led lawmakers to pursue reform.
Key Features of the New Law
The cornerstone of Ohio’s property tax reform is the introduction of inflation-based limits on certain unvoted property tax increases.
Under the new law, growth in “inside millage”—the portion of property taxes that can be imposed without voter approval—will now be capped based on inflation. County budget commissions are required to adjust tax rates so that revenue from these unvoted taxes does not rise faster than inflation, helping prevent unexpected spikes in tax bills tied solely to rising property values.
Another major component of the reform addresses school district funding. Certain school taxes, including those tied to the 20-mill floor, will now be subject to an inflation cap credit, limiting how much these taxes can increase each year while preserving stable funding for schools.
The reform package also strengthens local oversight and transparency. County budget commissions have expanded authority to review, reduce, or reject excessive levies, and several technical changes clarify levy calculations and aspects of the property valuation and appeals process.
What This Means for Local Governments
For local governments and school districts, the reforms introduce new budgeting considerations. While the legislation does not reduce existing tax rates or eliminate voter-approved levies, it does limit automatic revenue growth from rising property values for unvoted taxes.
As a result, local governments may experience slower revenue growth, particularly in periods of rapidly increasing property values. This may require greater emphasis on long-term financial
planning, voter-approved levies, and careful evaluation of spending priorities. Budget commissions will play a more active role in overseeing millage rates and ensuring compliance with the new inflation caps.
Importantly, the reforms preserve local control by allowing communities to seek voter approval for additional funding when necessary. The intent of the legislation is not to undercut essential services, but to ensure transparency, accountability, and alignment between tax increases and voter consent.
What This Means for Property Owners
Collectively, these reforms are expected to deliver billions of dollars in property tax relief statewide over the next several years. For individual property owners, the most immediate benefit is greater predictability. While property values may continue to rise, tax increases tied to unvoted levies will now be constrained.
How Our Firm Can Help
Although the new laws are designed to simplify and stabilize property taxation, they also introduce new rules that property owners and local governments must navigate. Reviewing tax bills, evaluating valuation changes, and understanding compliance obligations will remain important.
If you have questions about how Ohio’s property tax reforms affect your home, business, or local government operations, our firm is available to help you understand your rights and options under the new law.
