Cost Segregation in Ohio

Full bonus depreciation conformity, ultra-affordable housing, and three major metros with strong rental demand make Ohio one of the highest-ROI states for cost segregation — where every dollar of tax savings stretches further.

Population
11.8M
Median Home
$215K
Property Tax
1.53%
5th highest in U.S.
State Income Tax
3.50%
Top Rate (Graduated)
Bonus Depreciation
Full
State Conformity
Avg. Insurance
$1,200
48% below average
Tax Strategy

Cost Segregation & Tax Rules in Ohio

Understanding how federal and Ohio state tax rules interact is critical to maximizing your cost segregation benefits.

Cost Seg Overview
State vs. Federal Rules
Tax Landscape
Median Home Price
$215K
Building Value
85%
of purchase price
Cost Seg Range
22-35%
of building reclassified
Median Home Age
50 yrs
Built ~1974
What Gets Reclassified

A cost segregation study identifies building components that can be depreciated over 5, 7, or 15 years instead of the standard 27.5 or 39 years. In Ohio, typical reclassification rates are 22-35% of building value.

Common Property Types
Single-Family DetachedBrick RanchSmall Multi-Family (2-4 units)Duplex/Triplex
Ohio's affordable property prices mean lower study fees with exceptional ROI. The older housing stock (median 1974) often has had significant renovations, creating additional reclassification opportunities for updated HVAC, electrical, and plumbing systems.
Overline Study Cost & ROI
Overline Study Cost
$499 - $2,000
Avg. ROI
10-40x

The math: A $215K property with 85% building value and 28% reclassification yields ~$19K in Year 1 federal tax savings at the 37% bracket — significantly more ROI than traditional studies costing $5,000-$10,000+.

Housing Stock Advantage

With a median build year of 1974, Ohio's housing stock has identifiable components (HVAC, electrical, plumbing, landscaping) that are strong candidates for accelerated depreciation.

Full Conformity
Ohio Bonus Depreciation Conformity

Ohio conforms to federal bonus depreciation under IRC Section 168(k). While OH uses a graduated income tax (currently 0-3.50%), cost seg reclassifications qualify for 100% first-year expensing on both federal and state returns, with the state benefit scaling with your income bracket.

What This Means for Your Investment: Full conformity means cost seg benefits are maximized in Ohio. Federal AND state deductions apply in Year 1. Combined with Ohio's affordable property prices, the ROI per dollar invested is among the highest in the country.

Federal vs. OH Depreciation Timeline
PeriodFederal TreatmentOH State Treatment
Year 1100% bonus depreciation100% bonus depreciation (full conformity)
Years 2+Standard MACRS schedulesSame as federal
Section 179 Expensing
State ConformityConforms

Ohio conforms to federal Section 179 expensing. For investors in Columbus's new-construction market (driven by the Intel megafab), Section 179 captures qualifying personal property that accelerates beyond standard cost seg timelines.

Key Takeaway

A $215K property with a $183K depreciable basis and 28% cost seg reclassification yields ~$18,933 in federal tax savings PLUS ~$1,791 in OH state tax savings in Year 1 — a total of ~$20,724 on a very affordable property.

Bottom Line

Ohio is a full-conformity state. Every dollar of federal bonus depreciation flows through to your OH state return with no addback or modification. The low property prices amplify your effective ROI on every cost seg study.

Eff. Property Tax
1.53%
5th highest in U.S.
Transfer Tax
$1 per $1,000 of sale price (conveyance fee)
State Income Tax
3.50%
Top Rate (Graduated)
Property Tax Details

Property taxes vary significantly by county. Cuyahoga (Cleveland) is among the highest at ~1.89%, while Franklin (Columbus) is ~1.56%. Ohio assesses at 35% of market value.

Assessment Methodology
MethodMarket value at 35% assessment ratio
Reassessment CycleEvery 6 years (with triennial updates)
Assessment BodyCounty Auditor
Appeal WindowJanuary 1 – March 31 of the year following the tax year
Appeal Success Likelihood
Good
LowModerateGoodVery High

Ohio's 6-year cycle with triennial interim adjustments creates a unique appeal cadence. The Board of Revision (BOR) handles county-level appeals at no cost. Ohio law allows recent sale prices as strong evidence. High effective rates in Cuyahoga County (Cleveland) and Franklin County (Columbus) make appeals particularly impactful.

Work with Overline — Our team helps Ohio investors identify over-assessed properties and file tax appeals. A successful appeal can save thousands annually and compounds your cost seg savings.

Illustrative Example

Cost Seg Example for Ohio

This example assumes a purchase eligible for 100% bonus depreciation. All factors below are based on averages from our historical cost segregation studies for OH properties. To see your exact savings, run a property-specific cost seg analysis below.

Typical Ohio Property Details
$
50%95%
5%35%
2%25%
Total Reclassified28% of building
10%37%
Estimated Year 1 Tax Savings
Building Value$182,750
$215,000 x 85%
Normal Annual Depreciation$6,645
$182,750 ÷ 27.5 yr (residential)
5-Year Reclassified$31,068
15-Year Reclassified$20,103
Total Accelerated$51,170
28% of $182,750 building value
Federal Tax Savings (Year 1)$18,933
$51,170 x 37% bracket
Total Year 1 Tax Savings$18,933
7.7x normal annual deduction captured in Year 1

OH State Tax: OH has full bonus depreciation conformity — your state tax savings also apply in Year 1.

Depreciable Basis

Land vs. Building Value in Ohio

The land-to-building ratio directly impacts your cost segregation benefit — only the building portion is depreciable. Here is how Ohio breaks down by region.

Statewide Average
Building (Depreciable)85%
Land (Non-Depreciable)15%
85%
Depreciable Basis
Breakdown by Region
Columbus Metro
80% Building

Rapid growth has increased land values in suburban Franklin County, but building ratios remain strong.

Cleveland Metro
85% Building

Depressed land values create exceptional building-to-value ratios — ideal for cost seg.

Cincinnati Metro
82% Building

Balanced market with moderate land costs and solid depreciable basis.

Dayton / Akron / Canton
88% Building

Very affordable markets with some of the best cost seg ratios in the Midwest.

Rural Ohio
90% Building

Lowest land costs in the state. Exceptional cost seg ratios but smaller rental markets.

Investor Takeaway

Ohio offers outstanding land-to-building ratios across virtually every market. Cleveland's 85% building values and Columbus's 80% ratios both support strong cost seg returns. The Midwest's affordable land means more of your investment dollar goes toward depreciable assets.

Insurance & Risk

Insurance Landscape in Ohio

Insurance costs directly impact your cash flow. Understanding Ohio's risk profile helps you budget accurately and avoid coverage gaps.

Avg. Annual Premium
$1,200
48% below average
National Average
$2,300
for comparison
Premium Trend
Rising 4-6% annually, below national trend
Primary Risk Drivers
1
Severe Thunderstorms & Wind
Ohio experiences frequent severe thunderstorms from spring through fall. Straight-line winds and microbursts cause roof and siding damage.
2
Hail Damage
Hail events are common in western Ohio. Roof replacement claims are the #1 driver of insurance costs.
3
Winter Storms
Heavy snow loads and ice damming can cause structural damage, particularly on older homes with aging roofs.
Coverage Recommendations
Standard homeowner's policy with replacement cost coverage
Wind/hail deductible awareness (typically 1% of dwelling coverage)
Sewer/drain backup coverage (common in older Ohio cities)
Umbrella liability policy ($1M+) for rental properties
Cost Seg + Insurance Connection

Ohio's extremely low insurance costs are a major advantage for cash flow. A cost seg study documents component values that support accurate replacement cost estimates — particularly important for Ohio's older housing stock where original construction costs may not reflect current replacement values.

Market Fundamentals

Economy & Housing Demand in Ohio

Strong economic engines create stable rental demand. Here is what drives Ohio's economy and housing market.

State GDP
$730B
Growing 1.8%/year
Unemployment
3.8%
Below national average
Median Income
$62,000
+15.2% over 5 years
Pop. Growth (1Y)
+0.2%
+15,000/year net migration
Major Industries
Healthcare16%
Cleveland Clinic and Ohio State Wexner are world-class systems. Healthcare is the #1 employer in most Ohio metros.
Manufacturing14%
Honda (Marysville), Intel (New Albany), GM (Lordstown area). Ohio is #3 in U.S. manufacturing output.
Finance & Insurance12%
Nationwide Insurance HQ (Columbus), Progressive Insurance (Cleveland), Fifth Third Bank regional operations.
Technology10%
Columbus is emerging as a Midwest tech hub with companies like CoverMyMeds, Root Insurance, and the Intel megafab.
Education9%
Ohio State University (65K+ students), Case Western, University of Cincinnati. Major demand driver for student housing.
Key Economic Engines
Intel $20B+ chip fab in New Albany: 3,000 direct jobs + 10,000 construction
Cleveland Clinic: 75,000+ employees, $13B annual economic impact
Honda: 15,000+ Ohio employees across 5 manufacturing plants
Ohio State University: 65K students creating massive housing demand in Columbus
Housing Demand Signals
5-Year Pop. Growth
+1.1%
Housing Permits YoY
+5.8%
Median Days on Market
28 days
Months of Inventory
1.8
Migration: Columbus drives most in-migration with tech job growth and affordability. Cleveland and Cincinnati attract healthcare and manufacturing workers. Intel fab bringing thousands of new residents to central Ohio.
Construction: Brick ranch single-story, Wood frame with vinyl siding, Basement foundation (very common), Split-level homes
Landlord & STR Rules
Landlord Friendliness
Friendly
Eviction Timeline
30-45 days
Rent Control
Prohibited statewide (Ohio Rev. Code § 3735.67)
STR Regulation
Minimal

Ohio has no state-level STR ban or licensing. Regulation is at the municipal level. Columbus, Cleveland, and Cincinnati each have their own rules, but most are permissive with registration requirements.

Local Markets

Top Cities for Investors in Ohio

Explore city-level cost segregation data, sample deals, and investment fundamentals for each major market in Ohio.

Columbus, OH
#1 in Ohio
Median Home
$290K
Rent (3BR)
$1,700
Property Tax
1.56%
Avg. Insurance
$1,200/yr
Est. Year 1 Tax Savings$28K+
View Columbus Details
Cleveland, OH
Healthcare Hub
Median Home
$195K
Rent (3BR)
$1,350
Property Tax
1.89%
Avg. Insurance
$1,100/yr
Est. Year 1 Tax Savings$19K+
View Cleveland Details
Local Partners

Investor-Friendly Partners in Ohio

We are building a curated directory of top investor-friendly brokers, property management companies, and service providers in Ohio.

Investor-Friendly Brokers

Top real estate agents who specialize in investment properties and understand cost segregation, 1031 exchanges, and cash-flow analysis.

Coming Soon
Property Management

Vetted property managers who handle tenant screening, maintenance, and rent collection for both long-term and short-term rentals.

Coming Soon
Insurance Agents

Independent insurance agents who specialize in rental property coverage and can leverage cost seg data for accurate replacement cost estimates.

Coming Soon

Are you a broker, property manager, or insurance agent serving investors in Ohio?

Partner With Overline
Frequently Asked Questions

Cost Segregation FAQ — Ohio

Does Ohio conform to federal bonus depreciation?

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Ohio conforms to federal bonus depreciation under IRC Section 168(k). While OH uses a graduated income tax (currently 0-3.50%), cost seg reclassifications qualify for 100% first-year expensing on both federal and state returns, with the state benefit scaling with your income bracket.

What is the property tax rate in Ohio?

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The effective property tax rate in Ohio is 1.53%, ranked 5th highest in U.S. in the U.S. Property taxes vary significantly by county. Cuyahoga (Cleveland) is among the highest at ~1.89%, while Franklin (Columbus) is ~1.56%. Ohio assesses at 35% of market value.

How much can I save with cost segregation in Ohio?

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A $215K property with a $183K depreciable basis and 28% cost seg reclassification yields ~$18,933 in federal tax savings PLUS ~$1,791 in OH state tax savings in Year 1 — a total of ~$20,724 on a very affordable property.

What are the typical cost segregation reclassification rates in Ohio?

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In Ohio, typical cost segregation studies reclassify 22-35% of building value into accelerated depreciation categories (5-year, 7-year, and 15-year property). Overline studies cost $499-$2,000 with 10-40x ROI.

What is the average insurance cost for rental properties in Ohio?

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The average annual homeowner insurance premium in Ohio is $1,200, which is 48% below average the national average of $2,300. Key risk drivers include Severe Thunderstorms & Wind and Hail Damage.

What is the state income tax rate in Ohio?

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Ohio has a state income tax rate of 3.50% (Top Rate (Graduated)). Ohio uses a graduated income tax with rates from 0% (first $26,050) to 3.50% on income above $115,300. The Commercial Activity Tax (CAT) applies to businesses with gross receipts over $150K. Individual investors pay the personal income tax rates.

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