Ohio Is Ending the Rental Property Tax Rollback
Short answer: Ohio is phasing the non-business property tax rollback off residential rental property. It drops to 7.5 percent for tax year 2026, then 5 percent, then 2.5 percent, and reaches zero for tax year 2029 and after. Over the same four years the owner-occupancy credit climbs from 2.5 percent to 15.38 percent. If you own a rental in Mahoning, Columbiana, or Stark County, the tax line in your cash flow is scheduled to rise, and it is not a market change you can wait out.
Most of what moves a rental property’s numbers is a forecast. Rents might rise. Values might soften. Insurance might do something unpleasant at renewal. This one is different. It is written into the Ohio Revised Code with dates attached, and it applies to every residential rental in the state on a schedule that is already running.
Our team works with investors across Youngstown, Salem, Alliance, Canfield, Lisbon, and Columbiana, and this change has come up in almost every conversation about a rental purchase since it took effect. It deserves a plain explanation, because the way it is usually described online is wrong in a specific and expensive way.
What the rollback actually is
Ohio has long applied a percentage reduction to certain property tax bills before you pay them. The one people call the ten percent rollback lives in Ohio Revised Code section 319.302. It reduced qualifying taxes by ten percent, and for a long time it applied to residential property generally, whether you lived in it or rented it out.
Separately, if you live in the home you own, you have also received an owner-occupancy credit, historically 2.5 percent, under section 323.152. That one has always required occupancy.
Recent amendments to both sections pull those two apart. The rollback is being withdrawn from rental property while the owner-occupancy credit grows. The practical effect is a transfer: relief moves from people who rent out houses to people who live in them.
The schedule, year by year
Section 319.302 sets the rental side out in words rather than a table. It provides for seven and one-half per cent for the first tax year to which the amendment applies, an additional cumulative reduction of two and one-half percentage points for each of the following two tax years, and zero per cent for and after the third following tax year. Section 323.152 states the owner-occupancy percentages directly: 5.70 percent, then 8.92 percent, then 12.15 percent, then 15.38 percent for the third following tax year and every year after.
Put together, that is the schedule below.
| Tax year | Rollback on rental property | Owner-occupancy credit |
|---|---|---|
| 2025 and earlier | 10% | 2.5% |
| 2026 | 7.5% | 5.70% |
| 2027 | 5% | 8.92% |
| 2028 | 2.5% | 12.15% |
| 2029 and after | 0% | 15.38% |
The part almost everyone gets wrong
You will read in a lot of places that rental property never qualified for the rollback in the first place, on the theory that renting is a business use. That is not what the statute says, and acting on it will cause you to misread your own tax bill.
Section 319.302 defines residential activity to include leasing property improved with single-family, two-family, or three-family dwellings. A one to three unit rental is residential activity under the statute. It has been receiving the rollback, and it still receives a reduced version today. What is happening is a scheduled phase-out, not a discovery that rentals were never eligible.
That distinction matters for two practical reasons. First, if you are underwriting a purchase this year, the rollback has not vanished yet, so a bill that assumes zero is too pessimistic for 2026 and too optimistic for 2029. Second, when the reduction changes on your bill, you will know why, rather than assuming the auditor made an error.
Farm land is treated differently. Section 319.302 keeps the full ten percent for property intended primarily for use in a farming activity. If you own tillable acreage in Columbiana County alongside rental houses, the two are not on the same schedule.
The caveat competitors leave out: qualifying levies
Neither reduction applies to your whole tax bill. Both apply only to what the statute calls qualifying levies. In broad terms those are levies approved before September 29, 2013, levies inside the ten-mill limitation, and renewals or substitutes of qualifying levies. Newer voted levies are not included.
This is why two houses on the same street can show different effective reductions, and why the percentage in the table is not simply a percentage off your total. Over time, as districts pass new levies, a smaller share of a typical bill sits inside the qualifying category at all. The phase-out is happening on top of that slower drift.
If you want to know how it lands on a specific parcel, the county auditor is the office that can tell you. We are lenders, not tax advisors, and the arithmetic on any individual bill belongs to the auditor and your CPA.
Why this shows up in a DSCR file
On a DSCR loan, qualification runs on the property’s own numbers rather than your personal income. The debt service side of that ratio includes taxes and insurance, not just principal and interest. When the tax line rises, the ratio falls, and nothing about the rent has changed.
A DSCR loan is for non-owner-occupied property only and is documented as business-purpose lending. That is a statement about how the loan is classified, not a claim that the standards are lighter. Because the property carries the file, a scheduled increase in its tax expense is a scheduled decrease in its coverage ratio.
The illustration below shows the shape of that, using a hypothetical property. These are not quotes, not predictions, and not a statement about any real parcel or any real tax bill.
| Hypothetical scenario | Monthly tax line | Direction of the ratio |
|---|---|---|
| Rollback at 10% (hypothetical) | Baseline | Baseline |
| Rollback at 7.5% (hypothetical) | Slightly higher | Slightly lower |
| Rollback at 0% (hypothetical) | Largest of the three | Smallest of the three |
The point is not the size of the move, which depends entirely on the parcel and its levies. The point is the direction and the fact that it is scheduled. If you are buying a rental you intend to hold past 2029, underwrite the tax line you will have then, not the one on today’s bill. Escrow analysis works the same way here as it does on an owner-occupied loan, and our guide to how escrow accounts work in Canfield covers the mechanics of a payment that adjusts when taxes move.
If you live in the house, this moves the other way
The owner-occupancy credit is a homestead benefit. Section 323.151 defines a homestead as a dwelling owned and occupied, and both conditions have to hold. Buy a house to live in and the credit is scheduled to grow substantially over the same four years. Move out and rent it, and you lose it entirely.
Section 323.152 also permits a board of county commissioners to authorize an additional partial exemption of up to two and one-half percent by resolution. That is what the statute allows. Whether the commissioners in any particular county have adopted one is a question for that county, and we are not going to tell you that yours has.
Local tax levels differ more than people expect across this area, and our look at why Columbiana County property taxes are lower than you think and our breakdown of how Lisbon property taxes hit a monthly mortgage payment both show how much the county line matters.
What to do with this
Three things are worth doing now. Pull the current tax figure for any property you are considering from the county auditor rather than from a listing sheet, since listing data is often a year or more stale. Ask your CPA how the phase-out interacts with your own return, because the rollback is a reduction on the bill and not a deduction on your taxes, and the two get confused constantly. And when you underwrite, run the ratio at the tax line you expect in the year you expect to still own it.
Investors who are converting a home they used to live in have a second issue layered on top of this one, since the owner-occupancy credit ends when occupancy does. That is its own topic, and we cover it in our guide to turning your Ohio home into a rental.
If you are weighing a rental purchase in the Valley and want the tax line built into the numbers properly from the start, our team is glad to walk through it with you. You can start a pre-approval whenever you are ready, and every figure is subject to a full loan estimate and subject to credit approval.
Frequently asked questions
Does a rental property in Ohio still get the rollback in 2026?
Yes, at a reduced rate. For tax year 2026 the reduction on residential rental property is 7.5 percent of qualifying levies rather than the former 10 percent. It steps down again in 2027 and 2028 and reaches zero for tax year 2029 and after.
Was rental property ever eligible, or is this a correction?
It was and still is eligible today. Section 319.302 defines residential activity to include leasing single-family, two-family, and three-family dwellings. This is a scheduled phase-out, not a finding that rentals never qualified.
Does the reduction come off my entire tax bill?
No. Both the rollback and the owner-occupancy credit apply only to qualifying levies, which in broad terms are levies approved before September 29, 2013, levies inside the ten-mill limitation, and renewals or substitutes. Newer voted levies are not included, so the percentage is not simply a discount on the total.
What happens to farm land?
Property intended primarily for use in a farming activity keeps the full ten percent under section 319.302. It is not on the residential phase-out schedule.
How does this affect a DSCR loan approval?
Taxes sit inside the debt service side of the coverage ratio, so a higher tax line lowers the ratio even when rent is unchanged. On a property you plan to hold past 2029, it may make sense to look at the ratio using the tax figure you expect then. Program requirements vary by lender, and any file is subject to a full loan estimate and subject to credit approval.
Can my county add an extra reduction?
Section 323.152 permits a board of county commissioners to authorize an additional partial exemption of up to two and one-half percent by resolution, on property already receiving the owner-occupancy exemption. Whether a given county has adopted one is a question for that county’s commissioners and auditor.
Talk through the numbers with our team.
Call (330) 337-3260, email TeamDawes@FairwayMC.com, or get pre-approved online.
This article is general information about Ohio property tax law and is not tax advice, legal advice, or a determination about any specific property. Statutory reductions apply only to qualifying levies and the effect on any individual parcel depends on that parcel’s levies and valuation. Your county auditor is the only office that can tell you what applies to your property, and questions about your own return belong with your CPA. William Dawes, NMLS #259692. Fairway Independent Mortgage Corporation, NMLS #2289. All loan programs are subject to credit approval and subject to a full loan estimate. This is not a commitment to lend.