School Income Tax Resources You Need to Read before Buying a Home

School Income Tax Resources You Need to Read before Buying a Home

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.

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About the Author

Susanne has helped more than 500 home buyers or sellers in the past 3 years. She is consistently ranked among the top 1% of all real estate agents in Central Ohio. Connect with her on Google+ or call or text her at (614) 975-9650.

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