Did you know that property taxes are NOT the only taxes that fund schools? The School Income Tax is a hidden tax you should explore before you make an offer on a new home.

Many buyers select the location of their home based on the school district. They either want to send their kids to a certain school in a top rated district, or they move out of a school district to lower their property taxes.

In some Columbus suburbs property taxes are substantially higher than in the City. Take Dublin as an example, where you pay around $10,400 per year for a $400,000 home.

Should You Move to Another School District?

Once your kids are in college you may decide to move out of the suburbs into a township to avoid high property taxes. You may be up for an expensive surprise when you find out that many rural school districts levy a school income tax.

Instead of paying higher property taxes, you may be stuck with a school income tax of as much as 2% of your income.

Scioto Reserve, North of Powell, is a large subdivision divided into 2 school districts: Olentangy Local and Buckeye Valley. Although home values are about the same, Olentangy’s property taxes are substantially higher than those in Buckeye Valley: a $300,000 home may cost you approximately $5,800 per year in Olentangy Schools, but only $3,400 in Buckeye Valley.

However, Buckeye Valley charges a school income tax of 1%. So, if you earn $100K a year you’ll pay an extra $1,000 in school taxes.

Who’s Charging a School Income Tax?

The good news is that Columbus and most of its suburbs (except of Bexley) do not charge a school income tax. However, it is very common in rural areas and townships. Lancaster and Newark are among the larger Central Ohio Cities that charge a school income tax.

To find the school district for a specific address go to the Ohio Department of Taxation’s website and use the School District Finder.

Here’s a list of school districts that charge a school income tax.

Susanne has been a Real Estate Agent for 10 years, she spent 5 years at an independent brokerage before her and her husband opened a RE/MAX brokerage in Dublin, OH. She has worked with hundreds of clients to find their perfect homes. She works diligently to get you the most money when you sell your house and she goes above and beyond to find the right homes that you are looking to buy.

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