Budget Update: Senate Approves Budget Bill with Major Impacts on Housing and Property Taxes
By Anastasia Kotkovskaya, Manager, Advocacy and Research
The Ohio Senate has officially passed its version of the state’s two-year operating budget, moving one step closer to finalizing the policy that will shape Ohio’s fiscal priorities through 2027. While the final version is still subject to change as House and Senate leaders work to reach an agreement, key issues that impact housing, property taxes, and development remain a top priority for lawmakers.
Below are key changes that were made during the Senate committee process:
Property Tax Reform Highlights
- Tax Challenge Loopholes: Removes House language closing loopholes in HB 126, which aimed to rein in aggressive property tax challenges by school districts
- Simplifying Levy Types: Eliminates several types of local property tax levies that school districts can propose, including replacement, emergency, substitute, income, and fixed-sum levies
- Cash rule for School Levies: Prohibits a school district from proposing a current expense levy to voters if they have a cash balance greater than 100% of their previous year’s general fund spending
- One Levy at a Time: Prohibits a school district from combining a renewal levy with an increase to an existing levy
- Levies That Count Towards the Floor: Requires current emergency levies and substitute tax levies to be included in the 20-mill floor for schools, which will protect against unvoted increases in property taxes
- Budget Commission Authority: Allows a county budget commission to reduce the rate on any voter-approved tax levy, excluding debt levies, if the commission finds the revenue excessive or not needed
- Ballot Transparency: Requires schools to include on ballot language the percentage and funding of any carry-over balance they had from the previous year
- Carry-Over Threshold: Increase from 30% to 50% the threshold of carry-over balance allowed before a county budget commission must reduce a school district’s property tax collections, a provision that was created during the House’s work on the budget bill
Housing and Development
- $25M New Residential Economic Development District Grants: Replaces the House-proposed Housing Accelerator Fund with a new grant program. To qualify, local governments near major economic development sites must adopt pro-housing policies and support workforce housing projects
- $100M Residential Development Revolving Loan Fund: Offers loans for infrastructure to support single-family housing in rural counties (population under 75,000) with below-average housing permits. Homes built using these funds would be exempt from property taxes, with payments instead used to repay the loan
- Homebuyer Plus Program: Makes technical adjustments to the program that are supported by both the Ohio Treasurer and the Department of Taxation
- Ohio Housing Trust Fund: Reverses concerning House-made changes to the Ohio Housing Trust Fund that would have shifted control away from the state level. Preserves centralized oversight and ensures that resources are directed where they are needed most
- HSTS – Soil Evaluations: Removes language that would have prohibited the Ohio Department of Health from requiring soil evaluations for home sewage treatment systems (HSTS)
- Maintains Clarifying language to Written Representation Agreements: The Senate maintained language clarifying legislation passed last session (HB 466) dealing with written representation agreements that REALTORS® must enter with their clients
- Planned-Unit Development and Township Referendum: Raises the threshold for referendum petitions on local zoning amendments from 10% to 35% of electors, a shift that may make zoning changes more difficult to challenge
- OHFA Shift: A proposal to move the Ohio Housing Finance Agency (OHFA) under the Department of Development was removed from the bill. This was a concerning change, as the OHFA Board would have also been eliminated, with REALTORS® and other subject matter experts losing a seat at the table. OHFA is a quasi-independent agency governed by a Governor-appointed and Senate-confirmed Board
Housing Incentives & Tax Credits
- Brownfield Remediation: Maintains funding at $250 million. Grants would now be limited to projects tied to specific economic development plans, where a private entity demonstrates intent to build or redevelop on the brownfield site
- Historic Building Rehabilitation Tax Credit: Originally proposed for a $120M increase, then dropped to $90M in the House, the Senate has now reduced it back to $60M and added a sunset date in FY 2027
- Lead Abatement Tax Credit: Removed the proposed increase from $10,000 to $50,000 that had been included in both the Executive and House versions of the bill
- TMUD and Opportunity Zone Tax Credits: Increases the total available TMUD credit from $100M to $150M but lowers the cap per project from $40M to $2M. It also increases Opportunity Zone tax credit funding from $ 25M to $ 50M annually
Income Taxes
- Income Tax Reduction: Reduces Ohio’s income tax to a flat 2.75% starting in FY26, with the phase-in beginning with a 3.125% rate in 2025
As the budget process moves into its final phase, House and Senate leaders will meet to reconcile differences between their versions. Ohio REALTORS® will remain actively engaged to ensure the final budget supports strong housing policy, protects the real estate industry, and promotes sustainable growth across the state.
Learn more about Am. Sub. HB 96 below:
Ohio REALTORS Testifies in Senate on State Operating Budget: Key Tax and Housing Provisions in Focus
State Operating Budget Moves to Senate with Housing Provisions in Play
Ohio's Budget Breakdown: Key Provisions to Watch
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