Property tax can be complicated, and we want our residents to be as informed as possible. Here are some of the common terms used when discussing levies and property tax:
Assessed value is the value assigned to a property by the county auditor for the purpose of calculating property taxes. Assessed value is not the same as the fair market (or appraised) value, which is the price your property would likely sell for on the open market.
Continuous levy refers to millage that has been allocated for an unlimited (or continuous) period of time, either through state allocation or voter approval.
Effective tax rate is the rate after the tax reduction factor is applied. Taxpayers are protected from unvoted increases in taxes by Ohio Legislation known as House Bill 920. Passed in 1976, HB 920 reduces your tax rate as property values in your district increase during triennial reappraisals.
Fixed Income Status means that the amount of money a property tax levy collects cannot increase beyond the sum collected in its first year, except for added value from new construction during the first year. This became law in 1976 with the passage of Ohio House Bill 920, which reduces the tax rate as property values in a district increase during triennial reappraisals. The reduced tax rate is also called the effective rate.
Gross millage is the number of mills originally approved or assigned in the first year of a continuous or limited-term levy.
Homestead exemption is a reduction in property tax that is available to qualifying senior citizens, those with a permanent disability, and surviving spouses of a public service officer who was killed in the line of duty. Property owners must apply for the Homestead Exemption through Montgomery County and reside in the home for which they are applying.
Inside millage is the part of your tax rate that is set by the Ohio Constitution — up to 10 mills total — and does not require voter approval. That 10 mills is shared among local government units, such as the county, township, city, and school district. Of those 10 mills, Washington Township is allocated 3.05 mills from residents of unincorporated Washington Township and 0.7 mills from residents of the incorporated area.
Limited-term levy refers to levies that expire after a specified period of time.
Mills are how property tax is measured. A mill means 1/1,000. Therefore, each mill generates $1 of taxes for every $1,000 of a property’s assessed value.
Outside millage is any millage that has not been allocated by the Ohio Constitution. All outside millage is voted on by residents.
Property tax is a tax on the real property owned by residents and businesses. Property tax includes the land and structures on it, but not the contents.
Reduction factor is a formula applied to businesses and homes in a taxing district so that Fixed Income Status will be maintained during triennial reappraisals. Specifically, the tax reduction factor equals the percent by which the sums levied for a particular levy would need to be reduced so that the current year’s taxes equal the prior year's net taxes. This results in what is called the effective tax rate.
Renewal levy is a property tax levy that collects the exact amount of taxes as the levy it replaces.
Rollback refers to two tax relief measures that were granted by the state for homeowners – a 10% rollback on all real property tax in 1971 and an additional 2.5% rollback in 1979 for owner-occupied properties. The rollbacks apply to all renewed levies and to new and replacement levies passed prior to August 31, 2013.
Special assessments are charges by your city, township, or county to cover the cost of improvements or services. Special assessments are usually for a limited duration, lasting until the project costs are paid off.
Tax as a percentage of market is a simple percentage used to estimate total property taxes for a property. Multiply the market value of your property by the percentage listed for your taxing district.
Tax rate is the total property tax rate paid by a business or individual for support of the school system, library, township, municipality, vocational school, community college, park system, and county-wide services. This rate includes voted millage and 10 mills of unvoted taxes (also called inside millage) guaranteed by the Ohio Constitution.
Taxing district is a geographic area that shares the same local property tax rate. In the case of Washington Township, incorporated (City of Centerville) residents are in one tax district, and unincorporated residents are in another.