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Proposal would enhance homestead exemption for disabled vets

Special to the Legal News

Published: January 6, 2014

In describing Ohio as “glaringly behind” almost every other state regarding homestead tax exemptions for severely disabled veterans, Rep. Anne Gonzales is pushing to allow permanently and totally disabled veterans to file for a homestead tax exemption before they are 65 years old.

“At the beginning of the year, Ohio was one of only four states in the U.S. that does not offer any sort of property tax relief for veterans. By passing this bill, we will not become the most generous, but we will finally become competitive with other states,” she said.

House Bill 85, jointly sponsored by Gonzales, R-Westerville, and Rep. Louis Terhar, R-Cincinnati, would reduce the value of a veteran’s real property by $50,000 for the purposes of assessing taxes.

For example, Gonzales said if a veteran owns property that is valued at $150,000, they would only be taxed at the level of a $100,000 property.

“When Ohio is compared to our immediate neighbors, this measure will place us above Indiana, who exempt a few thousand dollars in taxes, and below Michigan, Kentucky and Pennsylvania who assess no taxes on their disabled veterans,” she said.

Terhar said the homestead exemption was a constitutional amendment approved by Ohio voters in 1970 to reduce property taxes for senior citizens.

“To qualify for the homestead exemption under HB 85, an individual must be a veteran of the armed forces, who was honorably discharged with a service-connected total and permanent disability, and for whom a letter from the U.S. government or Department of Veterans Affairs has been issued certifying this status,” he said.

Terhar said data from the U.S. Department of Veterans Affairs estimates that there are approximately 8,000 permanently disabled veterans in Ohio who meet the service-related disability requirement for tax exemption under the proposed legislation.

“If the share of these disabled veterans who are homeowners is proportionate to the share of Ohio’s adult population who are homeowners, roughly 4,000 veteran homeowners would qualify for the exemption,” he said.

“Using data from the Ohio Department of Taxation, the average net tax per residential unit is $2,000. Multiplying half the average cost per unit by the estimated 4,000 exemptions would roughly cost the state $4 million.”

That figure is subject to change due to the volatility of property values, effective tax rates and numbers of disabled veterans.

Like Gonzales, Terhar noted that the majority of U.S. states provide some sort of property tax relief for veterans who are completely and permanently disabled.

“Almost all of the other states have recognized that for veterans who are 100-percent permanently disabled, owning a home may be the only tangible asset of value they have,” he said. “I believe that if this tax credit can help a permanently-disabled veteran stay in their home, then it’s a win for all parties involved.”

HB 85 has gained bipartisan support from Reps. Connie Pillich, Andrew Brenner, Terry Boose, Robert Sprague, Wes Retherford, John Becker, Timothy Derickson and Alicia Reece.

The bill is before the House Finance and Appropriations committee.

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