Property Values/Tax Appeals

Indiana's next statewide real property revaluation/reassessment is scheduled for 2011. However, local officials must now make annual adjustments to real property assessments to reflect the effects of inflation and deflation between revaluations.

The March 1, 2007, assessment date (for taxes payable in 2008) will include a trending factor. This factor will be placed on the March 1, 2006, assessment to reflect the increase or decrease in value between January 1, 2005, and January 1, 2006. For example, a trending factor of 1.25, or 125%, indicates values in the property's area have increased 25% since January 1, 2005.

Since the annual adjustments are based on sales and other market data, we anticipate noteworthy increases in assessed values for property taxes in areas where there has been significant appreciation in real estate over the past two years.

When an assessment notice is issued, the taxpayer has a 45-day window from the date of the notice to file an appeal contesting the assessment. It is important to know that, in some cases, a developer's discount or automatic abatement (RPID - Investment Deduction) may apply to a taxpayer's value. These discounts can provide relief to areas facing significant changes in assessed property value.

Indianapolis/Marion County
The County Reassessment is complete. The new 2006 assessed value will be shown on the 2006 Reconciliation Tax Bill. The 2006 Reconciliation Tax Bill is scheduled to be mailed in June, with a July due date.

The March 1, 2007, assessment notice (for taxes payable in 2008) should be issued in late summer. The 2007 (pay 2008) first installment tax bill is likely to be due in late fall.

Key Legislative Changes - 2008 Session

1. Caps on Future Property Taxes
   • For the Pay 2009 tax year, caps will be as follows:
     • 1.5% for residential homesteads.
     • 2.5% for non-homestead residential property, agricultural land, and long-term care property.
     • 3.5% for non-residential real property.
   • For the Pay 2010 tax year and thereafter, caps will be as follows:
     • 1.0% for residential homesteads.
     • 2.0% for non-homestead residential property, agricultural land, and long-term care property.
     • 3.0% for non-residential real property.
2. Homestead Deductions and Credits
   1. Standard Deduction for Homesteads is lesser of $45,000 or 60 percent of assessed value for the pay 2009 tax year and thereafter.
   2. Additional Supplemental Standard Deduction for Homesteads:
      After standard deduction, next $600,000 of assessed value will receive a 35 percent deduction, with a 25 percent deduction for the remaining assessed value over $600,000.
3. Seniors
   For persons 65 and older, with homes valued at $160,000 or less, and incomes that do not exceed $30,000 per individual, or $40,000 per couple, in addition to the 1% cap, the annual tax liability cannot increase more than 2% each year.
4. New Appeal Opportunity
   Taxpayer may file an appeal for the March 1, 2007, assessment date (for taxes payable in 2008) from an Assessment Notice, or the later of July 1, 2008, or 45 days after the 2007 pay 2008 first installment tax bill is issued. This reopens appeal deadlines throughout the state.
5. Assessors
   1. Transfers assessment duties of township assessors to county assessors in townships with fewer than 15,000 parcels as of July 1, 2008. Only 42 Township Assessors will remain in place after July 1, 2008.
   2. For townships with more than 15,000 parcels, referendum will be required in 2008 general election as to whether to transfer all remaining Township duties to the County Assessors.
6. Renter's Deduction
   Maximum deduction increased from $2,500 to $3,000.
7. Property Tax Replacement Credit
   Eliminated beginning in 2009. Redirects sales tax, income tax and gaming taxes previously deposited into the Credit to the State General Fund.
8. State Sales Tax Increase from 6% to 7%
   The State sales and use tax will increase from 6% to 7% beginning April 1, 2008.