Property Tax Caps Lift Financial Burden on Hoosiers
In November 2010, Hoosiers voted overwhelmingly to make permanent property tax caps a part of the Indiana Constitution. The constitutional amendment—the provisions of which originally went into effect under state law in 2009—limits property taxes on homestead property to no more than 1 percent of the gross assessed value of the property, other residential and agricultural land property to no more than 2 percent and all other property to no more than 3 percent. In light of the new property tax structure, I would like to address some of the more frequent questions I receive on this topic. First, the assessed values of all properties are adjusted on an annual basis through a process called “trending”. Trending is part of Indiana’s move to a market-based assessment system and works by adjusting the assessed value of property annually using factors based on the sale prices of similar properties within the same geographical area. Prior to trending, properties were only reassessed during a general reassessment, which occurs every six to ten years, leading to significant “jumps” in assessed values (and tax bills) between assessments. The trending model serves to smooth out these erratic “jumps” and allows all taxpayers to better plan and budget. The county assessor (or township assessor, if you live in one of the 14 townships that still has one) is responsible for establishing the fair market value for all property in the county (or township) for taxing purposes. Fair market value is the price a willing buyer would pay to a willing seller under normal conditions, and thus the assessed value of your home should approximate what you would reasonably expect the house to sell for if you placed it on the market. The county assessor determines the fair market value of your home by examining the sales of similar properties over the previous two years. As an example, the assessed value of your home as determined for Pay 2012 property tax bills should reflect the amount a willing buyer would have paid for the property as of March 1, 2011. The assessor calculates the value using sales information from 2009 and 2010. If you would like to contact your local assessor, please visit http://www.in.gov/dlgf/2440.htm. After assessments are completed, the property owner will receive a notice from the assessor outlining the assessed value of the property. In some counties, the assessor will send a separate notice, and in other counties the actual property tax bill will serve as the notice of assessment. If you believe that your assessment does not accurately reflect the market value of your property, then you have the right to file an appeal with the county assessor or the township assessor. There are two types of appeals – objective and subjective. An objective appeal disputes issues that are physically verifiable such as square footage of the property, whether there is a basement, etc. A subjective appeal disputes whether the property’s assessed value is consistent with the property’s fair market value. However, even this type of appeal allows the property owner to consult surrounding property values which can eliminate some of the subjectiveness to the process. For more information on the appeal process, please visit http://www.in.gov/dlgf/2508.htm or call the Department of Local Government Finance toll-free at (888) 739-9826. The DLGF website contains lots of information on the concepts I discussed plus information on how property taxes are calculated. If you have any other questions or comments feel free to contact me at (317) 234-2993 or h67@in.gov. State Representative Randy Frye District 67 -30-
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