Property Tax Relief for Qualifying Senior Citizens & Permanently Disabled Citizens
House Bill 293 passed the Ohio House unanimously on May 24, 2006 and now is pending in the Ohio Senate.
This legislation would make it possible for qualifying citizen's equity in their home to be used to help pay their property taxes. In many cases their income level has not kept pace with inflation since their retirement, but the value of their home as appreciated dramatically therefore significantly increasing their property tax burden and possible loss of their home. This provision would help diminish low and medium income senior citizens concerns regarding passage of school levies and their ability to meet their cash expenditures for food, prescriptions and other needs.
The bill would permit a board of county commissioners to establish a property tax payment linked deposit program, under which the county investment authority would deposit money with an eligible public depository institution at up to 3% below the market rate. In exchange for this below-market deposit, the financial institution would lend to an elderly or disabled homeowner, at up to 3% below the borrowing rate applicable to each eligible borrower, to pay property taxes on that borrower's homestead. To be eligible, the borrower would have to (1) be 65 years of age or older, or permanently and totally disabled; (2) be the owner of a homestead that is not charged with more than two years of delinquent taxes; (3) have had income in the year prior to applying of $50,000 or a lesser amount established by the board of county commissioners; and (4) have liens on the homestead plus the amount of the reduced rate loan total no more than 80% of the homestead’s true value as determined by the county auditor. The county investment authority, at the option of the board of county commissioners, would forego interest that it could otherwise earn on the money deposited. County funds could also be used, at the discretion of the board of county commissioners, to pay part or all of the closing costs and expenses of the reduced rate loans. The county, its investment authority, and the county commissioners would not be liable for repayment of the loan, protecting the county's deposit. Limits on the financial institutions that could participate in the program, to those meeting specified eligibility criteria, would appear to afford a significant degree of protection against loss. Absent such loss, no costs appear to be imposed on other units of local government. The lending institution would be secured by a tax lien certificate against the homeowner's property that would be superior to any subsequent tax liens as well as to all other liens and encumbrances described in that lien certificate.
Because availability of the program in each county would be at the discretion of county commissioners, whose budgets would be adversely affected under the program by the reduction of interest earnings on county funds, some counties might not participate. On the other hand, the program would give local officials an additional means of helping some financially troubled homeowners, who might otherwise face loss of their homes. Since the program would create a lien against each homeowner’s property, homeowners may be reluctant to participate unless faced with serious financial stress.
