Real Estate Tax Implications in Ohio: The Complete Guide for Homeowners & Investors

Nobody likes tax surprises — especially at the closing table. If you’re selling a home or rental property in Ohio, the tax implications can affect your bottom line more than any single repair or staging decision. From the Ohio conveyance fee and property tax prorations to federal capital gains, school district tax, depreciation recapture, and special programs like the Homestead Exemption and CAUV, there’s a lot to get right.

This guide breaks everything down in plain English so you can plan your sale confidently, whether you’re offloading a rental in Cincinnati, selling an inherited home in Cleveland, or moving out of your primary residence in Columbus. We’ll cover what’s taxable, what isn’t, how your county’s conveyance fee works, how credits are handled at closing, document requirements, and how to avoid last-minute deal killers.

Key Takeaways

• Ohio charges a real property conveyance fee when you transfer real estate. There’s a state fee of $1 per $1,000 of the sale price, plus an additional county “permissive” fee up to $3 per $1,000, so totals vary by county. (Examples inside.)
• Federal capital gains rules apply to Ohio sellers: up to $250,000/$500,000 gain exclusion on your primary residence if you meet the 2-out-of-5 year test; different rules for rentals and flips.
• Ohio taxes capital gains as ordinary income at the state level (no special capital gains rate), and some school districts tax traditional Ohio taxable income (which can include capital gains).
• Property tax credits/exemptions (Homestead, Owner-Occupancy 2.5% credit, Non-Business credit) affect your tax bill and the prorations at closing — they don’t usually change federal capital gains, but they matter for your net sale proceeds.
• CAUV recoupment can trigger a claw-back if agricultural land changes use after the sale — plan for it before you list.

Why Ohio Real Estate Taxes Feel Complicated (and How to Make Them Simple)

Ohio property taxes are administered at the county level, but anchored to state law. That means two sellers with the same price can pay different conveyance fees depending on the county. Add school district income tax, federal rules on gain exclusion, rental depreciation recapture, and special programs (Homestead, CAUV), and it’s easy to see why closings get tangled. The solution is a checklist: identify the taxes/fees that apply to your sale, confirm payoff and credit status, and price accordingly.

All the Taxes & Fees You Might Encounter When Selling in Ohio

Ohio’s Real Property Conveyance Fee (Transfer Tax), Explained

Ohio collects a state conveyance fee of $1 per $1,000 of the sale price. Counties may add a “permissive” fee up to $3 per $1,000, which means the total can vary as high as $4 per $1,000 in some counties. You’ll file DTE Form 100 with the county auditor when you transfer the deed. Example: On a $300,000 sale in a county with the full permissive fee, your total conveyance fee would be roughly $1,200.

Capital Gains on Ohio Home Sales: Primary Residence vs. Rentals

Primary Residence — The Section 121 Exclusion

• Own & use the home as your primary residence for 2 of the last 5 years.
• Exclude up to $250,000 of gain ($500,000 if married filing jointly).
• One exclusion every 2 years; special prorated exclusions may apply for job change/health/unforeseen circumstances.

Rental Property — Depreciation Recapture & 1031 Exchanges

• Depreciation recapture is taxed up to 25% federally when you sell a rental (to the extent of depreciation taken or allowable).
• A 1031 like-kind exchange can defer capital gains & recapture when you swap into another investment property (strict timelines & rules apply).
• Ohio taxes capital gains as ordinary income at the state level; your district’s SDIT may also apply depending on its base.

Ohio State Income Tax & School District Income Tax (SDIT)

Ohio doesn’t have a special rate for capital gains, they’re part of your Ohio taxable income (net of federal adjustments). Some school districts impose an additional income tax. If your district uses the traditional base, your capital gains can be included. If your district uses the earned-income base, capital gains are typically excluded. Check your address against Ohio’s SDIT list to estimate correctly.

Property Tax Timing, Credits & Prorations at Closing

Ohio property taxes are billed semiannually. At closing, the seller usually credits the buyer for the seller’s share of the current tax period (proration). If you receive the Homestead Exemption, the Owner-Occupancy (2.5%) credit, or the statewide Non-Business credit, they flow into your tax bill and therefore the proration math (i.e., they reduce what you owe in prorations). That doesn’t change your federal gain — but it changes your net check.

Special Situations That Change Your Tax Picture

Inherited Property

• Heirs typically receive a stepped-up basis to fair market value at date of death, which can reduce capital gains on sale (federal rule; Ohio follows federal approach in determining income). Confirm valuation with a retro appraisal.
• Estate may owe property taxes or have delinquent balances; clear at closing.

Divorce Sales

• Proceeds allocation doesn’t change the total tax due, but each spouse’s gain/exclusion is calculated based on ownership, use, and filing status for the year of sale.
• If one spouse kept living there, you may still qualify for the exclusion — check the “use” test carefully.

Foreign Sellers (FIRPTA)

• FIRPTA withholding can apply to foreign sellers. Work with the title company early so the right affidavits or withholding certificates are in place.

CAUV (Agricultural) Land

• If use changes post-sale, CAUV recoupment charges can apply for prior years. Budget for this in farm transactions and confirm with the auditor.

Documents & Forms Checklist

• DTE Form 100 (Conveyance Fee Statement of Value) — filed at the county auditor.
• Payoff/Lien letters — mortgages, HELOCs, HOA liens, tax liens.
• Property tax status — confirm delinquencies, credits/exemptions, and next due date with the treasurer.
• Homestead/Owner-Occupancy docs — for correct proration treatment.
• Settlement statement showing conveyance fee, prorations, and recording.
• For rentals: depreciation schedules, improvement receipts, and 1031 exchange docs (if applicable).

Pricing Strategy: How Taxes Affect Your Net Proceeds

Smart Ohio sellers reverse-engineer pricing from their net goal. Start with your target check, add expected costs (mortgage payoff, liens, conveyance fee, prorated property taxes, title & closing, and any required repairs), then set your list price accordingly. If you’re doing a rent-ready turnover or your buyer asks for credits in lieu of repairs, revisit your net model before signing the addendum.

Frequently Asked Questions 

Does Ohio have a separate capital gains tax?

No. Ohio taxes capital gains as ordinary income as part of Ohio taxable income. Federal capital gains rules still apply.

How much is the Ohio real estate transfer tax?

Ohio charges $1 per $1,000 (state) plus a county permissive fee up to $3 per $1,000, so the total depends on your county.

Can I exclude my gain on a home I lived in?

Yes, if you meet the 2-out-of-5-year ownership and use tests (up to $250k single / $500k married filing jointly). Some exceptions allow a partial exclusion.

Do the Homestead or Owner-Occupancy credits reduce my capital gains?

No. they reduce your property tax bill (and thus prorations), not your federal gain.

How are property taxes handled at closing?

They’re prorated between buyer and seller based on the closing date and current half-year cycle; Ohio bills semiannually.

Will my school district tax apply to capital gains?

It depends on the district’s tax base: traditional base includes Ohio taxable income (which can include capital gains); earned-income base generally excludes capital gains.

Step-by-Step: A Clean, Tax-Smart Sale in Ohio

1. Confirm your county’s conveyance fee and whether any exemptions apply to your transfer.
2. Request property tax status from the treasurer (delinquencies, credits/exemptions, due dates).
3. Pull payoff and lien letters early (mortgages, HELOCs, HOA, municipal/utility, tax liens).
4. Establish your basis with improvement receipts; for rentals, pull depreciation schedules.
5. Run a net sheet with different close dates to see how prorations and credits change.
6. Choose your sale path: MLS (potential repairs, timing) vs. as-is cash (speed, certainty, lien handling).
7. File DTE 100 at transfer and keep copies for your records at tax time.

Conclusion: Sell in Ohio With Confidence (and No Tax Shock)

In Ohio, a great sale price can be undermined by unexpected fees, prorations, or tax treatment if you don’t plan ahead. When you model your net, confirm your county’s conveyance fee, and understand how federal gain rules, state income tax, and school district tax interact, you can choose a sale path that preserves your profit, whether that’s a traditional listing or a quick, as-is cash sale.

Need help building your net and avoiding last-minute surprises? We’ve got your back statewide.