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Thousands of Montgomery County property owners could be eligible for property tax rollback

According to county records, 10,223 of the properties in question are in Dayton; 1,885 are in Kettering; 1633 are in Huber Heights; 1471 are in Trotwood; 1,315 are in Harrison Twp.; 1,213 are in Miami Twp.; 984 are in Washington Twp. and 837 are in Centerville. About 19,000 of the letters were mailed to addresses in Montgomery County or the Dayton area, but some listed different states or regions in the state.

Thousands of Montgomery County property owners may have been overcharged on their real estate taxes in part because of a computer error, county officials said.

Last month, the county sent 21,125 letters to the owners of 26,306 residential properties to determine if they were rentals or owner-occupied. Owner-occupied properties are eligible for a 2.5 percent property tax break.

However, Montgomery County Auditor Karl Keith said, a computer program failed to flag some owner-occupied properties and apply the tax credit. Additionally, he said, some property owners failed to apply for the tax credit. And in other cases, when new homes were built on once vacant land, the property owner failed to notify the auditor’s office of a change in the occupancy status.

Keith said the errors were discovered during an effort to register all rental properties in the county as required by Ohio law. The letter was sent to owners whose properties were not registered as rentals and were not already receiving the tax credit to determine if they were rentals.

In cases of computer error, Keith said his office will retroactively apply the rollback from 2008 to the present for eligible homeowners, who will receive a credit on their February 2013 tax bill.

“We want to make sure they get the credit and if they are getting the credit and shouldn’t be, we want to make sure that is cleared up,” Keith said.

About 7,000 of the letters have been returned. Of those returned letters, 2,000 owners declared their properties to be their primary dwelling — making them eligible for the property tax break. The average 2.5 percent tax break for each eligible property owner is $75 each year or $375 for five years.

About 1,000 of the returned letters were on properties with ownership issues that the county is investigating. It’s unclear at this time how many of those will be eligible for the tax break.

Another 3,000 responses were new rental registrations and not eligible for the tax break. Other responses are still being inputed into the county’s computer system.

“Certainly, there were some eligible for the rollback who didn’t get it,” Keith said.

Those who received the tax break in error will not have to pay money back, Keith said. It was not immediately clear how many people received the credit, but shouldn’t have. Keith’s office will follow a “long-standing” practice that allows for corrections because of clerical errors.

Dayton resident Karen Harker said she was baffled after receiving a letter August 16 asking if she rented out her Berrywood Drive home. Two women in her office received similar letters, she said

We bought it from the builder,” Harker said. “We didn’t change our name. We didn’t change anything (about the property record) since we bought it in 2004.”

Harker said she pays her property taxes through her mortgage company and didn’t know there was an issue until receiving the letter and later asking. Auditor’s staff estimated that Harker’s credit should have been $160 annually.

When she contacted the county, she said she was told there was a clerical error.

“Why can’t they go back and see when the clerical errors were made,” she asked. “It just didn’t seem right that they could make a mistake this big.”

Keith said jurisdictions — school districts and municipalities — impacted by the tax credits will be reimbursed by the state.

Property owners may apply for the primary residence owner-occupied tax break between the first Mondays in January and June. Typically, that application may go back one year, Gary Gudmundson, communications director for the Ohio Department of Taxation said.

Gudmundson suggested the county auditor convey the specifics of the situation to the state tax department so an informed decision can be made as to whether each of the reimbursements will be for five years or one year.

County Auditor Association of Ohio President William L. Farrell of Sandusky County urged residents to review their tax information as the onus of ensuring accuracy ultimately is on them — even if taxes are paid in escrow through a mortgage company.