The state of Ohio quietly rewired who pays what in residential property taxes, and the mechanism is sitting right on your second-half 2026 bill, which arrives around July 13.
House Bill 186, signed by Governor Mike DeWine on December 19, 2025, phases out the 10% nonbusiness credit for non-agricultural residential properties while simultaneously increasing the owner-occupancy credit from 2.5% to 15.38% over four years. What that means in plain English: the tax discount that landlords and rental property owners have collected for decades is being stripped away and handed to the people who actually live in their homes. If you own and occupy your home in Cuyahoga County, this law works in your favor. If you own a rental property — or if your landlord does — the math is moving in the opposite direction.
This shift, under Ohio Revised Code Sections 319.302 and 323.152 as amended by HB 186, is the most significant restructuring of residential property tax credits in Ohio in roughly fifty years.
What the law actually changed — and what it replaced
To understand what HB 186 does, you need to understand what was there before.
Ohio has had two property tax credits stacked on top of each other for pre-2014 levies. The first, the nonbusiness credit, applied a 10% reduction to one-, two-, and three-family dwellings — including rental properties. The state paid that discount on behalf of all qualifying residential property owners, whether they lived in the home or not. The second, the owner-occupancy credit, gave an additional 2.5% reduction but only to homeowners using the property as their primary residence.
Under the old structure, the nonbusiness credit provided a 10% reduction to all residential and agricultural property owners, and the owner-occupancy credit provided an additional 2.5% reduction exclusively to owner-occupants. Together, a homeowner living in their house got 12.5% off their qualifying levies. A landlord renting out a duplex on the east side of Cleveland got 10% off the same levies — almost as good a deal, without living there.
That symmetry is now ending.
The four-year phase-out that landlords are already feeling
The act eliminates the nonbusiness rollback for residential property through a four-year phase-out: 7.5% in tax year 2026, 5% in 2027, 2.5% in 2028, and 0% in 2029. Correspondingly, the owner-occupancy credit increases to 5.70% in 2026, 8.92% in 2027, 12.15% in 2028, and 15.38% in 2029.
Run those numbers side by side and the story is clear:
- A landlord in 2026 still gets the nonbusiness credit — but only at 7.5%, down from 10%. By 2029, that credit disappears entirely.
- A homeowner in 2026 sees their owner-occupancy credit jump from 2.5% to 5.70%. By 2029, they’re collecting a 15.38% credit on those same qualifying levies — nearly triple what they had before.
The credits only apply to levies passed before November 2013, so newer levies aren’t affected either way. But a lot of Cuyahoga County’s school and municipal levies predate that cutoff, which means the credits are real and the swing is meaningful.
What a Cuyahoga landlord actually loses — in dollars
Here is a concrete example using Cuyahoga County numbers.
Take a landlord who owns a single-family rental home in Parma with a current market value of $185,000. At Ohio’s 35% assessment rate, that produces a taxable value of $64,750. At an effective tax rate of around 2.3% on qualifying levies — a reasonable figure for much of Parma’s school district — the tax on those levies before credits is roughly $1,489.
Under the old structure, the landlord got a 10% nonbusiness credit: a $149 reduction, paid by the state on their behalf.
Under HB 186 in tax year 2026, that credit drops to 7.5%: a reduction of about $112, a loss of $37 for the year. Modest in year one, but the landlord loses more each year. By 2029, the nonbusiness credit is gone, and the landlord is paying that full $149 with no offset. The homeowner next door, living in a comparable house, will instead be collecting a 15.38% owner-occupancy credit — roughly $229 off their bill.
According to Representative David Thomas, one of HB 186’s primary sponsors, eliminating the nonbusiness credit for companies and investors that own large numbers of rental properties shifts roughly $400 million per year toward the owner-occupied credit.
Who wins, who loses, and who gets nothing
The homeowner living in their primary residence in Cuyahoga County wins — assuming their school district qualifies. The credit phases in automatically; no application is required for the owner-occupancy change. If you’re already enrolled in the owner-occupancy credit with the Cuyahoga County Fiscal Office, the updated percentage applies to your eligible levies without any action on your part.
Owner-occupied homes that serve as a taxpayer’s primary residence will ultimately receive a larger overall credit — though the net increase for many owner-occupants over what they currently receive is approximately 2.88% above what they get today, once the full phase-in is complete. That is because the old 12.5% combined credit and the new 15.38% fully phased-in credit are close to each other. The real gain is in who gets what — homeowners keep their benefit and get more; landlords get steadily less.
Landlords lose — gradually, then entirely. If you own a rental property in Cuyahoga County, your effective tax burden on pre-2014 qualifying levies increases every year through 2029. Whether that cost gets absorbed or passed to tenants through rent increases is a business decision, but it is a cost that was not there before.
Agricultural landowners are exempt from this shift. The full 10% nonbusiness credit continues to apply to nontimber agricultural land under HB 186.
Renters sit in a complicated middle. The law doesn’t directly affect them, but landlords facing higher property tax bills have a documented history of folding those costs into lease renewals.
The Cuyahoga wrinkle: the HB 186 inflation cap credit is uneven
There is a second piece of HB 186 that hits Cuyahoga County differently from much of the state, and it is the piece most local homeowners have heard about — the inflation cap credit on 20-mill floor school districts.
Property owners in 63 of Ohio’s 611 school districts receive no tax cut from the 20-mill floor inflation cap provision, including 19 of Cuyahoga County’s 32 school districts — among them the Cleveland Metropolitan School District. Another nine Cuyahoga County school districts would receive an estimated cut of less than $10 per $100,000 in property value.
That credit, tied to whether a school district sits at the 20-mill floor, is separate from the nonbusiness credit phase-out and owner-occupancy expansion. The rollback restructuring applies regardless of school district. The inflation cap credit is where geography in Cuyahoga County matters most. If you live in one of the 19 districts that gets nothing from the cap credit — including most of Cleveland — you’re still benefiting from the owner-occupancy credit increase, but you won’t see the additional 20-mill floor reduction that homeowners in other parts of Ohio are receiving.
What you should check before August 13
Your second-half 2026 bill arrives around July 13 and is due August 13. That bill is the first one to reflect the HB 186 changes on a second-half statement.
Look at the credits section of your bill. You should see an increased owner-occupancy credit if you live in your home. If you don’t see the credit at all, contact the Cuyahoga County Fiscal Office — they handle the owner-occupancy credit enrollment — or call the Treasurer’s Office at 216-443-7400, Option 1.
If you own a rental property in the county, check the nonbusiness credit line. It will be lower than prior years. That difference is permanent under current law and grows through 2029.
The law is already in motion. For homeowners in Cuyahoga County, this is the year it starts showing up.