[r63] Property tax protection for homeowners

Posted by: Zach Weismiller  | Friday, May 30, 2014

Many of you reading this today probably own a home, and if you don’t, chances are, one day you might. Homeownership is a huge step in life that unfortunately does not come with an instruction manual; however, it does come with many added responsibilities, including paying property taxes.  

Prior to 2002, property in the state of Indiana was reassessed every five to 10 years, potentially leaving taxpayers with a large change in their assessed home values between reassessments. Naturally, this often led to sudden increases in property tax bills. 

In an effort to address this, in 2002, the state began valuing properties using mass appraisal techniques, in which one piece of property is looked at in conjunction with other properties in the area. For example, assessors consider factors such as a home's age, grade and condition. In the annual adjustment known as "trending," recent property sales data is used to determine if the value of properties in your area should change to match the market value found in comparable properties.  

Unfortunately, this new system was far from perfect. In fact, it resulted in many taxpayers throughout the state having to appeal their property value assessments every year, which became burdensome for property owners.  

For example, if someone’s house is originally assessed at $100,000, and then, other houses in the area, with similar size and structure, are assessed at $150,000, generally, the first home’s assessment would be raised to $150,000 as well. This could be done even if the actual value of the house did not change.

Typically, what happens next is that the first homeowner will appeal the property assessment in order to have it lowered or reassessed. Despite winning the appeal and even if their property assessment is lowered, they must go through the same process all over again the following year using the old property value as it was originally assessed. 

It’s not difficult to imagine why the homeowner may not be very pleased to have to pay a higher property tax rate based on the increased assessment value; especially in the many cases in which that new value is not the actual value.

In order to fix this bug, this session, we passed Senate Enrolled Act (SEA) 266 to ensure that an assessment, which has gone through the appeal process, would be used as the basis for any future assessments. This should lower the need for multiple appeals and reduce costs for both the taxpayer and the county.

It also requires the burden of proof in any increase in the assessed value to be on the assessor. If the increase is over 5 percent, the homeowner may introduce evidence to prove the correct assessment. If neither the assessor nor the homeowner prove their case, the value reverts back to the assessment for the prior year. 

I was pleased to support these clarifications and modifications which I believe they will create a much more efficient appeal process and benefit both local governments and taxpayers. 

As a conservative, there are a limited number of things that I think the government should or needs to be involved in, but in those rare cases, we need to continually improve how government is operating to benefit Hoosier families. I believe that SEA 266 does just that, and I will continue to look for ways to make government operate as effectively and efficiently as possible. 

If you can think of a situation in which you have been personally impacted and have an idea which could make our state government operate more efficiently, I hope that you will share it with me!